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Table of Contents
Click on the article or case title to go to that page
Editorial Policy
Letter from the Editor
Case Abstracts
Cases
“Sally’s Dilemma: Making Tough Choices in Collaborative Visioning”
Karl A. Hickerson, David J. O’Connell & Arun K. Pillutla, St. Ambrose University
“The Death of a Salesman Revisited: Part A”
Herbert Sherman, Long Island University & Daniel James Rowley, University of
Northern Colorado
“The Death of a Salesman Revisited: Part B”
Herbert Sherman, Long Island University & Daniel James Rowley, University of
Northern Colorado
“Customer Service at the Jewish Community Center”
Edward Demarais, Salem State College, Sandra Sheckman, & Gina Vega, Salem State
“The Frozen Production Line”
Anton Massman, U.S. Air Force, Elaine Davis & Janell M. Kurtz, St. Cloud State
University
“Dow Chemical and Agent Orange in Vietnam”
Cedric Dawkins, California State Polytechnic University – Pomona

Membership Form

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EDITORIAL POLICY

The audience for this journal includes both practitioners and academics and thus encourages submissions from a broad range of individuals.
The CASE Journal invites submissions of cases designed for classroom use. Cases from all business disciplines will be considered. Cases must be factual, and releases must be available where necessary. All cases must be accompanied by an instructor’s manual which identifies the intended course, relevant theoretical concepts or models that can be applied, and the research methodology for the case. The instructor’s manual should also contain discussion questions and suggested responses, and a teaching plan if not inherent in the Q&A.
The CASE Journal also invites submissions of articles relating to case teaching, writing, reviewing, and similar topics. Conceptual papers and papers reporting original research as well as the applied implications of others' research in terms of case teaching, research, and instruction; and creative learning, research and writing methods are encouraged. We request that submitters of empirical research provide appropriate data set analyses to allow for meta-studies (i.e. correlations matrices and chi-alpha’s).
Because of the broad appeal of the journal to practitioners and academics, The CASE
Journal will not refuse to review a case or an article solely on the basis of format.
However, if a case or paper is accepted, the final version for publication will be expected to adhere to the publication and manuscript guidelines. Cases and papers may be returned due to issues relating to writing style and grammar.
The CASE Journal encourages authors to submit often to the Journal. However, authors who are published in one publication year cannot be published a second time in that publication year. Rather, additionally accepted papers will appear in subsequent publication years. This policy does not apply to authors who submit papers for review with different second authors from those on the first accepted paper in any given publication year.
CASES: Those wishing to submit a case for potential publication should submit the entire case along with the completed teaching notes for review. If accepted for publication, only the case will be published along with a note for interested readers to contact the case author for the teaching notes. All review and publishing rules which apply to scholarly articles also apply for cases. Also, upon acceptance for publication, The CASE Journal requires that the author(s) submit a signed letter of liability release prior to publication.
Authors are responsible for distributing the teaching notes as requested by CASE
Association members and their e-mail addresses will be provided for such purpose.

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INITIAL SUBMISSION:
All cases and articles will be subject to a double blind review process. Our reviewers believe that the process is developmental, and will offer suggestions for improvement and revision, where appropriate.
All manuscripts submitted are to be original, unpublished and not under consideration by any other publishing source. To ensure the blind review, there should be no authoridentifying information in the text or references. An abstract of 150 words or less should accompany any article, and should be included in the instructor’s manual accompanying any case. This journal will only accept on-line submissions. Send one (1) copy to the editor by e-mail in MS-Word. A separate title page must accompany the paper and include the title of the paper and all pertinent author information (i.e. name, affiliation, address, telephone number, FAX number, and E-mail address). If any portion of the manuscript has been presented in other forms (conferences, workshops, speeches, etc.), it should be so noted on the title page.
COPYRIGHT: Authors submitting articles and cases for potential publication in The
CASE Journal warrant that the work is not an infringement on any existing copyright and will indemnify the publisher against any breach of such warranty. Upon acceptance for publication, authors must convey copyright ownership to The CASE Journal by signing a publication agreement, signed and dated by all authors, which also certifies that the article/case is original, not published elsewhere, and that they have permission to use all proprietary and/or copyrighted material.
Cases published in The CASE Journal and their instructors’ manuals are also distributed through the Primis Online and ecch distribution networks.

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Sponsorship:

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Free with membership in The CASE Association
None. However, at least one of the publishing authors must be a member of the CASE Association at the time of publication ($25 membership fee)
Professional Association

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LETTER FROM THE EDITOR

Welcome to the spring issue of Volume 4 of The CASE Journal. This edition offers five cases (one a series), all in the area of management. Nevertheless, they cover a wide range of issues, from the human relations aspects of a personal career decision, to religious diversity, to ethical implications of a company’s products. Other challenges include managing change in a large group setting and responding effectively to a changing external environment. Two cases feature non-business organizations that nevertheless face management issues with transferable learning for students.
The first case in this edition is “Sally’s Dilemma: Making Tough Choices in
Collaborative Visioning.” Sally is the project coordinator for a university which is going through the process of defining the vision of its future. Her challenge is to pull together the ideas of many individuals and help them to come to agreement – not an easy task, given their diversity of programs, interests, and objectives. Students are given her task of creating and managing change in a large group setting.
“The Death of a Salesman Revisited: Parts A & B” is also the story of change. In this case, the protagonist is in the midst of a career change. In the A case, his concern is the risk of giving up his current position for a new retail opportunity that was offered to him by chance. In the B case, he has completed the training program and is facing the reality of his new assignment. The job search, interviewing and hiring processes are all issues that undergraduate students in particular will find relevant.
The focus of “Customer Service at the Jewish Community Center” is also on personal interactions in a service setting. Here, however, students are challenged to diagnose the sources of the problems facing the Executive Director. Customer service is only one of many issues that make day-to-day and long term management difficult and frustrating.
Changes in the external environment as well as working with the Board of Directors and an unhappy staff create problems for the Executive Director and opportunities for students to apply many critical analytic and decision-making skills.
In “The Frozen Production Line,” managers are faced with unfamiliar and potentially disruptive behavior by a new group of workers. The new workers are Sudanese immigrants who need time for the evening prayers required by their Islamic faith, but management must also consider the plant’s union rules. The case gives students the opportunity to consider the implications of diversity. The case’s epilogue, available in the instructors’ manual, describes how Electrolux handled this situation, and also offers teachable moments around balancing conflicting interests.

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The final case in this edition, “Dow Corning and Agent Orange in Vietnam,” asks questions relating to corporate responsibility. While lawsuits on behalf of U. S. soldiers had been settled out of court in the mid-1980s, Dow was still facing lawsuits from
Vietnamese civilians who claimed that they and their children had been harmed by the dioxin in Agent Orange. The case gives students the opportunity to look at issues relating to ethics, moral leadership, stakeholder claims, and issue management, and can lead to discussion of the appropriate role for corporations as part of government/ military activities. The authors of these cases have been concerned not only with the stories that their cases tell, but also, and more importantly, with how to make those stories translate into learning for students. All cases that are published in The CASE Journal have thoroughly developed instructor’s manuals, sometimes longer than the case, that offer pedagogical insights grounded in theory. While the Journal does not publish the instructor’s manuals, they are a critical part of the review process. Faculty members adopting a case should get in touch with its authors for the manual.
The cases also bear the influence of the dedicated reviewers who work anonymously with the authors and editor to make each case an effective teaching and research vehicle. The reviewers will often read several versions of a case and its instructors’ manual, making detailed recommendations at each stage. These dedicated people take on this task in addition to their own teaching, writing and research. Their only reward is the gratitude of this editor and of the authors, those already published and those who hope to be. If you would like to be part of this process, working with authors to create truly excellent cases and instructors’ manuals, please let me know!
I hope that you will enjoy this edition of the journal. Please feel free to e-mail your comments, cases, articles and suggestions to me at margaret.naumes@unh.edu.
Margaret Naumes

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CASE AND ARTICLE ABSTRACTS
Sally’s Dilemma: Making Tough Choices in Collaborative Visioning
Karl A. Hickerson
David J. O’Connell
Arun K. Pillutla
St. Ambrose University
This case involves an experience in large group visioning, specifically the processes of developing and building consensus around institutional goals and objectives. It takes place at a point roughly halfway through the process. The protagonist, Sally, is the project coordinator. At this point in the process, the participants have collectively invested hundreds of hours in the creation of widely diverse ideas for the future of the university. Her dilemma is the challenge of maintaining the commitment and support of the participants as the vision is reduced to a much shorter and more focused statement.
The case is based on archival data and interviews with 40 of the 300+ participants who were engaged in the process, including Sally, steering committee members, faculty, staff, and outside stakeholders (alumni and members of the board of directors). The Instructor’s Manual provides key questions for future large group process consultants, OD professionals and students of organizational behavior and leadership, including references from the OD and visioning literature. An Epilogue provides the actual decision at the time of the challenge and its rationale.

The Death of a Salesman Revisited: Part A and B
Herbert Sherman, Long Island University
Daniel James Rowley, University of Northern Colorado
Derived from field and telephone interviews, e-mail communications, and secondary sources, this two part case describes how Gerald Mahoney, a shoes salesman in a Foley's Department store, is faced with a problem - Macy's has bought out the Foley's chain and, in doing so, has upscale the product line of shoes and altered his commission-based compensation system. These changes have resulted in less sales for Mr. Mahoney and therein lower commission - a difficult situation since he, his wife, and his daughter were barely getting by on his currently salary. Part
A of the case describes an opportunity that presents itself to Mr. Mahoney; to leave his current job with a guaranteed low salary with possible additional income from commissions for a job selling residential homes which becomes purely commission-based to start with after three months of a salary plus commission pay that includes job training. In Part B Mr. Mahoney has decided to take the sales job with ABC Home Builders and receives his assignment. He finds that the working conditions of the sales office are not conducive to selling. His office is located in the rear of a trailer that is extremely run down and is paired with a competitive, noncommunicative saleswoman. The case ends with Mr. Mahoney feeling hopeless and alienated.
This two part case has been written primarily for an undergraduate junior level course in career planning or sales management and deals with the issues of recruitment, placement, training, and

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compensation. The case may also be employed in a course dealing with human resource management (from an individual's perspective), salesmanship, and organizational behavior.

Customer Service at the Jewish Community Center
Edward Demarais, Salem State College
Sandra Sheckman
Gina Vega, Salem State
Doris, the Executive Director of the JCC, had a Board of Directors that lacked the requisite skills, perspective, behaviors, and willingness to change policies and practices in order to meet external environmental opportunities and threats or to address internal competencies and competitive capabilities. Changes in the external environment were exacerbating the JCC’s internal deficiencies. In addition, the Board created impediments to the professional staff’s efforts to implement good managerial practices and policies. The current management team was acutely aware of the changes in the external environment, how these changes impacted the JCC’s operations and what the JCC needed to do in order to meet these challenges. The management team was frustrated by a Board that did not provide leadership, fulfill their responsibilities, hold each other accountable and undermined management by intervening in day-to-day operations.
The staff was passively hostile to the Board and to the management team. As consumers, the members’ expectations were higher and more demanding. Doris and her management team had to resolve a myriad of strategic and operational issues that confronted the organization.

The Frozen Production Line
Anton Massman, U.S. Air Force
Elaine Davis, St. Cloud State University
Janell M. Kurtz, St. Cloud State University
Workforce diversity is a reality and offers many benefits to business. Nevertheless, managing diversity poses numerous challenges. This case involves religious diversity, focusing on employers’ legal duty to accommodate religious practices. In the case, the assembly line at
Electrolux’s Frigidaire plant in St. Cloud, Minnesota hummed with activity when suddenly a group of Somali workers walked off the line. The Somali employees were new immigrants and introduced cultural and religious customs which were for the most part unfamiliar to management. The employees were Muslim and left the work stations to observe sunset prayers, one of the five daily prayers central to the Islamic faith. The management dilemma presented in the case is balancing the demands of assembly line production with the religious requirements of
Muslim workers in a legal and effective manner. There is a substantial epilogue detailing
Electrolux response to the situation which can be used as the basis for further class discussion.
To help guide this dialogue, a “mini-instructors manual” follows the epilogue.

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Dow Chemical and Agent Orange in Vietnam
Cedric Dawkins, California State Polytechnic University – Pomona

This case examines the ethical issues raised when businesses contract for the military during time of war. Dow Chemical Company was a military contractor during the Vietnam War and the primary producer of Agent Orange – a defoliant used to clear vegetation. Agent Orange has been linked to a number of serious medical conditions in war veterans and Vietnamese civilians.
In 2004, Vietnamese citizens filed suit against Dow for illnesses they believe were caused by exposure to Agent Orange. Dow thought the issue should have been addressed through political and social policy, while Vietnamese citizens and U.S. Vietnam war veterans believed Dow was ethically responsible. As the case moved through the U.S. judicial system, some of Dow’s investors grew uncomfortable with how it was handled. Dow CEO Andrew Liveris was left to wonder what his company could have done differently and what they could learn from the Agent
Orange episode that might prevent similar problems in the future. This incident appeared to be a relatively distinct case, but in July of 2007 it was reported that the number of private contract employees in Iraq exceeded that of U.S. military personnel. Consequently, it is likely that companies and their stakeholders will have to address similar issues.

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Sally’s Dilemma: Making Tough Choices
In Collaborative Visioning
Karl A. Hickerson, Ph.D.
St. Ambrose University
David J. O’Connell, DBA
St. Ambrose University

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Arun K. Pillutla, Ph.D.
St. Ambrose University

An optimistic person by nature, Sally felt herself having uncharacteristic anxiety. She couldn’t put her finger on it, at first. After all, it was a Spring day full of sunshine. She was walking across a campus that was looking more and more attractive by the month. And the Vision 2020 process, her big “A” priority project and the reason she was here on this beautiful day, had reached an important milestone. Her oversight group, the Steering Committee for Vision 2020, was great to work with—supportive and had people with many great ideas for the project. And yet, here she was, having pangs of dread.

It seemed like it had only been a few weeks since she had applied for this job. Actually it was a matter of months. Sally had been hired to oversee a significant vision development process for
St. Ambrose University, a regional, Midwestern Catholic institution, organizationally connected to the Catholic Diocese of Davenport. It seemed exciting at the time—it was forward looking work, all about planning and encouraging people to positive action. The project was to create a vision for the university 20 years into the future that would be called “Vision 2020.” But it was in fact work, lots of learning, lots of hours talking to people, and now, it seemed, plenty of anxiety about whether this vision would achieve its purpose: that people would be energized and feel called to positive action. There were more than 300 inside and outside stakeholders who had already invested thousands of hours of work.

A

LL

The first of two large group meetings, involving all of the participants in the process, had just occurred. It was called “Summit 1.” It was a multiple day, professionally facilitated gathering in which the recommendations of the original twelve focus area teams were shared. Participants then “voted” on priorities by distributing a number of colored sticky dots among their favorite recommendations. But the crucial action taken at this event was the consolidation of the twelve focus teams into six—the six areas that would become key components of the University’s vision. This was done behind the scenes by the consultants and the Steering Committee between
Day 1 and Day 2 of Summit 1, based, in part, on the sticky dot votes that were cast.
In the end, would there be any agreement among all of the faculty, students, alumni and community supporters that had been successfully engaged up to this point? And what would be the response of the Board of Directors? Would the results for the University over the long term justify the six-figure grant it received, and all of this time and effort invested by the University?

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The primary question was “how should they proceed at this point in the process?” Should focus teams be encouraged to continue to meet during the summer? What direction should they be given now that the original twelve teams were consolidated? It was clear that there would still need to be some consolidation and the creation of an actual vision statement that could not be written by 300 people. So how could they support the effort from this point forward? What, specifically should they be told to do?

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Debating with herself, Sally tried to turn over the options in her mind. If the teams could be given some specific work direction and encouraged to continue to meet during the summer, they would be more likely to stay engaged in the process during the next phase that would begin in the Fall. If they didn’t meet, people might drift off and that would hurt the implementation effort. Or, if they didn’t meet, would they come back refreshed and more enthused? Sally considered the possible assignments they could be given. Maybe they could work on further defining their “new” focus areas. Maybe they could work on developing more specific goals and objectives for their own, or even other areas. But summer meetings would also increase the stakes. If there was a lot of effort invested in further development work, what if the final, boiled down vision statement turned out not to be very well aligned with some of the teams’ work?
Participants could feel even more disenfranchised. And there were a lot of people involved.
That could threaten the whole project! Logistically it would be impossible for someone to guide all of these teams during the summer. So the questions seemed to be “should the teams meet, and if so, how much should they meet, and what would they do?”
At this point, Sally was involved in a large group process, in this case applied to visioning, specifically taking input and building consensus around institutional goals and objectives for the future. She was well into the planning process: A grant had been received, she, as the dedicated visioning coordinator, had been hired, the Steering Committee had been identified and put in place, and the consultants had been engaged. But from the point of view of 300+ visioning process participants, it was roughly halfway through the process of meetings and feedback—so the jury to decide the quality of outcomes from the point of view of a variety of stakeholders was
“still out.” Sally’s dilemma was how to address the challenge of consolidating input in a meaningful way for many participants who had invested time and effort in addressing problems and creating a picture of the ideal future state.

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THE UNIVERSITY: A CULTURE OF COLLABORATION

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St. Ambrose University was a private Catholic University in Davenport, IA. In early 2000, the school had a total enrollment of approximately 3000, including undergraduate and graduate students (see Appendix A). The University’s primary mission to be a residential, undergraduate liberal arts institution had been reaffirmed throughout its 120 year history since its founding as a seminary for young men. This mission was evident in broad general education requirements in the liberal arts and in many programs to support undergraduate education. But given its Catholic history, the University also maintained a collectivist culture and aspired to serve the needs of the broader community. This part of the mission was evident in the addition of several graduate programs in human services and technology, including graduate degrees in social work, education, criminal justice, information technology, occupational therapy and physical therapy.
An MBA program was introduced in the mid-1980s and a doctor of Business Administration in the late-1990s. At the time of Vision 2020, the physical therapy program had been recently upgraded to the doctoral level, as well. At the time of Vision 2020, St. Ambrose was
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experiencing positive undergraduate enrollment growth, as well as the addition of new professional and human service programs. Its annual budgets were consistently balanced.
FROM PROBLEMS TO PLANNING

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Why did the school need a vision? Not everyone agreed. In fact, people did not completely agree on how the whole idea came about. “Vision” meant different things to different people
(see Appendix B). Sally had learned that, in the past, the school had used a planning process that was very budget-focused. Rather than thinking “big”, the process came down to a struggle to allocate tuition dollars to a competing set of university needs expressed by faculty, students, administrators and board members (an illustration of the breadth of this competition is provided by Appendix C). One faculty member put it this way:
“I had been appointed…to the planning committee…After I had served on it, I think about two cycles through, the planning coordinator at the time had surveyed the planning committee members and said “Send me some thoughts on what you think went well this year and what you think needs to be improved”.” I remember typing up a memo…I was kind of a squeaky wheel because I raised some concerns with the planning process…and so (the planning coordinator) put together a…sort of committee to evaluate the planning process and try to change it.”
The planning coordinator summarized the need for a broader view in this way:

“Before I was planning facilitator, I was on the planning committee itself, for many years…(and) after a couple of years, I developed a very strong sense that, while we were doing a very effective job in terms of short term planning, in terms of budgeting for the upcoming year, we were not doing a very good job in terms of the more long range and strategic planning…We thought that one way to do this was to consult with our stakeholders or constituencies, to bring in a broad cross section, if you will, of people from different backgrounds and not all people from this campus. We were particularly interested in getting input from alumni and friends throughout the community and beyond.” A

LL

During this period of internal debate, conversations between Advancement and planning committee members revealed that other institutions had done this with apparently good results— but that it took a significant financial commitment, upwards of $50,000-100,000, to do it.
Advancement staff were also aware that there were funding sources available and one, in particular, seemed attractive. This Advancement staff member said:
“(Our planning coordinator) became aware of the Teagle Foundation and learned that the person heading up this fund liked to fund projects that were "strategic" in nature and that he responded most favorably regarding these kinds of projects by talking with the university's president. Some of our peer institutions were receiving grants from Teagle which also helped to highlight this possibility.”
A grant proposal was drafted by the planning coordinator. In addition to a broad description of goals for long range planning and shorter term initiatives that would need to be addressed in the ensuing five years, the grant proposal included funding for a three year, full time planning
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coordinator. This was the position eventually filled by Sally. The proposal was reviewed by the university president, Dr. Ed Rogalski, and submitted in late September, 1998 following the president’s visit in New York with the president of the Teagle Foundation. The proposal was approved by the Foundation in February, 1999. Following the grant approval, the University started its visioning process.
THE EMERGING VISION 2020 PROCESS

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Some remarkable circumstances produced the Vision 2020 plan and its ultimate execution. As one faculty member put it “…there was an amazing alignment of the planets.” These included the reporting of studies by three outside consultants, the identification of a funding mechanism and the personal relationships to land it, the identification and commitment of several key leaders, and a wise decision to hire consultants experienced in facilitating large group visioning processes. Seeds Sown and Hope for Rain
In 1998 and 1999 three consulting firms were engaged by the university to address significant concerns facing the University. One firm addressed issues of declining enrollment. Another focused on establishing a unified, integrated “brand image” for the school. A third was engaged to focus on the physical facilities and to assist in development of a campus master plan.
In Fall, during the opening assembly for the 1999 academic year, the three firms presented their collective views for university improvements. These included the need to become much more sophisticated in managing the entire enrollment process. Likewise, the facilities planning firm demonstrated a “visitor’s view” of the campus, making many recommendations to increase the welcoming atmosphere and convenience for those visiting the campus. The marketing firm reported on the current image of the school in the community. These three reports provided the context in which Vision 2020 was conceived, as well as the background information to help drive the visioning process.

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The Grant Proposal
Frustration about the lack of criteria associated with the allocation of limited funds was the motivation to pursue something broader and bigger—like a real, long term vision. The burning question was “would their (budget) decisions be the best for the University over the long haul?”
Both the commitment and time required to determine how the University’s future should look were lacking. Outside funding provided a possible solution. One member of the planning committee suggested that the Teagle Foundation was a possible source of funds. His comment was: “Well, Teagle, at that time, had a reputation for being interested in supporting private higher education and also in supporting institutions that were small to medium sized…and you know that reputation was well known and that is why we were kind of encouraged to try and see if they would be interested in our project…I think the people in
Advancement were aware of it (Teagle) and I think were looking for the right project for them.” This faculty member volunteered to write a grant proposal. It was submitted and resulted in a request for the President to travel to New York to meet the president of the Teagle Foundation.
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That visit resulted in a six figure grant to “engage in a visioning process.” Labeled at the time
“Vision 2010: An Agenda for the Future”, the grant proposal included the following statement:
While our short-term planning has been quite successful, defining longer range directions and goals has often been given secondary consideration since most attention is focused on the plan’s first year and preparing the operating budget. What, for example, should St.
Ambrose be like ten years from now with respect to student enrollment and tuition?
Services provided? Facilities? Academic curriculum? Relationship to the Diocese?

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It was clear to many in the University, and certainly to the planning committee, the lack of long range planning and its consequences. Ironically, it was the outside consultant whose hiring was an outcome of this grant, Steven Ames, who suggested that the effort should be called “Vision
2020” to take advantage of the “clear vision” connotations.

Who Can Lead This Effort?
Immediately following the grant award, a Steering Committee was formed to provide broad leadership and direction of Vision 2020. Appointed by the president, the Committee consisted of people that the President believed to have strong interest in the institution and its future. The group included faculty from the Physical Therapy and Chemistry programs, a University dean, a
Vice President, two members of the University Advancement Office, and upon her arrival, the
Vision Planning Coordinator – Sally.
Sally was hired in August, 1999 with the active involvement of the Steering Committee. Most importantly, beyond hiring Sally as the project Coordinator, the Steering Committee was also responsible for assigning Vision 2020 participants among the areas to be addressed during the visioning process—and in the crucial consolidation of the twelve vision focus teams into six key areas for the University’s vision.

LL

We Need Outside Expertise!
The design of the Vision 2020 process, and some of the facilitation, was done with the help of three consultants. A key consultant, Steven Ames, was recommended by one of the University’s trustees and, with the encouragement of Advancement staff contacts from other universities, was hired as the lead consultant. Sally appealed to the Teagle Foundation to have a portion of the grant funds applied to be able to acquire this expertise.

A

The Need For Stages: What and How Many?
The process, involving so many people with such diverse perspectives, would clearly need some structure. Steven Ames suggested an overall project design involving four major steps and a timeline, together with an outline of the activities and key participants in the process. These steps were (a) framing the process, including the establishment of key areas of concern to be addressed and the input to be provided to participants, including Strengths, Weaknesses,
Opportunities and Threats analyses (SWOT analysis) conducted earlier by faculty and staff; (b) setting the context (deciding on team assignments and key documents to be provided); (c) creating the vision during Summit 1; and (d) affirming the vision during Summit 2 (see Exhibit
1). The two large group meetings in the plan, called “Summit 1” and “Summit 2” occurred in the third and the fourth stages. It was the first of these Summits that Sally was now pondering.

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Where did they stand (Sally, the consultants and the Steering Committee) with their stakeholder participants and what should they do next?
Figure 1

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Framing the Process

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Source: Sally Crino, Vision 2020 Project Coordinator (Originally from Steven Ames
Consulting. Used with permission.)

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Framing the Process
Step 1 in the overall project plan included orienting the key leadership team, appointing the
Steering Committee, establishing teams, and training team leaders. During this stage of the process, goals were established, consultants made site visits, and the Steering Committee created twelve areas of concern that would become the structure of vision focus teams and the basis for the selection and recruitment of team leaders.
The Steering Committee agreed on the following purpose statement and overall overarching intent of the project:
“To involve the wider University community in developing a long-range vision to guide future directions for St. Ambrose University.”
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Further, they established the following sub-goals of the project:

•
•
•
•
•

To involve the wider University community in developing long-range vision to guide future directions for St. Ambrose University
To understand SAU today
To envision SAU in the future
To support that future direction
To inform strategic planning
To develop community ownership of the vision and financial backing for SAU

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•

In a series of meetings, Steven Ames met with Sally, President Rogalski, and the Steering
Committee. These meetings provided communication about the backgrounds of potential participants and resulted in consensus on process and materials for Summit l (see Step 2, Exhibit
The president ultimately decided on internal and external leaders of the focus groups, as well as an external leader for oversight of the entire process.

Target Areas of Concern.
The consultants seemed to have a pre-conceived idea about what the outcomes should look like.
For example, Ames developed six “Overarching Themes” based on his preliminary interviews with the Steering Committee. He also provided a general format for the expected outcomes of
Summit 1. These were based on Ames’ experience in other university settings; however, several were influenced by St. Ambrose cultural history (see, for example, “Catholic Identity” in Exhibit
2). The overarching themes were to serve as primary questions to be answered by the visioning process. Ames also supplied the visioning process definitions (mission, values, vision and strategic plan) and overall visioning process goals to participants.

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The Steering Committee ultimately decided that there was a need to address twelve key areas of concern. These were derived from several sources—the areas of longstanding debate during budget planning meetings; the University’s current mission statement; and suggestions from consultants.

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Budget meetings always included the classic conflict between growth (student enrollment), the quality of students, classrooms, recreation facilities, and other buildings and grounds issues.
This invariably led to discussion of the University’s mission statement—and questions about serving a variety of stakeholders, including students, the local and regional communities. In addition, it led to a discussion of how to serve them. A member of the Steering Committee who had also been involved in planning and budgeting made reference to the sources of concern in this way:
“Some of them (the twelve areas) tied to areas that we already used in planning…I am sure that the names changed a bit but…it seemed like maybe there would be some different visioning to do when you thought about undergraduate students versus graduate academics…I know we had…areas for that. Some…areas tied back to the mission of St.
Ambrose, so you know, they (the students) developed intellectually, that was our

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academic (vision), physically, socially, artistically, and so on. Some of the (vision area) names are tied to our university mission…Student enrollment was a big area and one
(where) we thought that visioning could be carried out. You know, how big do we want to be in the future? It seemed like a very important question as you are thinking about resources…I believe some of the areas may have come from suggestions from these consultants that we worked with, too. Like one for the whole organizational excellence one…as you’re thinking about your organization it might be good to consider the overall excellence of the organization structure that you are working with.”

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During a review of the twelve areas, Ames proposed to the Steering Committee and to the president that the twelve areas of concern be consolidated into fewer focus areas. The Steering
Committee, however, felt that there should initially be twelve key areas that the University should address during the visioning process, so that participants could be assigned and more easily engaged in their respective areas of experience and interest. Participants were to be informed that these twelve areas would need to be consolidated in order to achieve a Universitywide vision statement. This would occur between Day 2 and Day 3 of Summit 1.
The original twelve areas were ultimately discussed during the first part of the process and later became known as the vision “focus areas.” They were: Catholic Identity; Undergraduate
Academic Programs; Graduate, Adult and Professional Programs; Academic Resources; Artistic
Programs; Social Programs; Physical (Education) Programs; Student Enrollment; Financial
Resources; Physical Plant; Organizational Excellence; and 21st Century Technology (Exhibit 2).
Ames recommended changing the vision horizon and name from “Vision 2010” to “Vision
2020.” This recommendation was immediately accepted and implemented by the Steering
Committee and the University leadership.

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A Significant Challenge: How to Deal with SWOT Analyses. In the fall of 1999 departments across the university analyzed their internal strengths and weaknesses while identifying external opportunities and threats, producing SWOT documents. More than 50 departments, programs and administrative sectors of the university participated. They ranged from specific academic departments such as art and chemistry, to graduate programs in business, the fine arts center, the admissions office and the library. These documents provided some of the background for a more fine-grained understanding of the current status and future hopes across the university. Input provided by the faculty and staff departments was consolidated by the consultants and these materials were provided to the Vision 2020 focus teams.
Who Would Be Recruited for the Task Force Teams? Given the twelve key focus areas to be considered for the vision, the Steering Committee brainstormed names of internal St. Ambrose faculty and staff and external stakeholders, including alumni, board members and community leaders, who could be helpful in the process of vision development. The most important personnel assignments were, perhaps, the group leaders. The group leaders were called Vision
Focus Group Leaders or, sometimes, Vision Task Force Chairs. The committee had decided each focus group was to be led by co-leaders—a combination of one inside and one outside stakeholder More Leaders Needed. The President recruited chairpersons of the key vision areas. A former local area executive who was a St. Ambrose University (SAU) board member was asked to chair
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the overall process. Each focus group team was chaired by someone external to the University.
Each team also had an internal facilitator, drawn from the University faculty or staff. One of the vision team members saw the value of the facilitators in this way: “I think in most of the cases, from people that I talked with, we see the moderator or the facilitator as the key people who kept this thing moving.”

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The Need for Training for Task Force Chairs and Facilitators. The hand picked Task Force
Chairs were brought together to discuss the visioning process and its expected products and outcomes, together with their roles in the first “convergence” meeting (Summit l). During the one-day training session, the Chairs were given document drafts by the consultants (the process overview—see Exhibit 1), together with a general format for the expected outcomes of Summit
A member of the Steering Committee described the training:

“We got those individuals together. We did some training of those individuals, especially the internal people. I remember because they were going to have the task of running the meeting with the outside board person kind of occasionally giving advice and having an important role that was maybe not as time consuming… (we also discussed) how to facilitate and get more out of people if only some are contributing…how to deal with difficult personalities that might show up.”
This member also listed a number of other training agenda items: Running an effective meeting.
How to be a good listener. Keeping groups to task. Being objective and giving people good air time. Managing participant behavior. Managing difficult people. Troubleshooting. Consensus and decision making. Time keeping and recording. The training was experiential. She commented that “we would practice some of those things just with our own internal people.”
Reactions to this training experience were generally favorable. As one Vision Task Force Chair put it:

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“I think we received some good training. However, given the different components, people we were bringing together to form the complexion of the committee, I don’t know if there was any amount of training that would prepare yourself for the fact that we were bringing community people, faculty, staff, students together in order to formulate our plans for our subcategory.”

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Committed Volunteers. An invitation was extended to faculty, staff and others identified as community leaders or key stakeholders to participate in the process. Respondents were sorted by their preference for various topics and assigned to Vision Focus Groups for Summit l.
Assignments were made by Sally working with the Steering Committee.
Setting the Context: Document Development for Summit 1
The consultants compiled the source documents provided by Sally, including the SWOT analysis results, into a document to be used in Summit l called the “SAU Background Report.” This report was presented to Summit l participants several days ahead of the meeting. It had two parts: (a) Strategic Issues (a narrative summary of the SWOTs by college, values, critical choices and enrollment statistics by program); and (b) Environmental Scan (trends in higher education and demographic changes by region, primary education systems, ethnicity, etc.).
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Creating the Vision
Summit 1 was the first of two stakeholder meetings (called “convergence” meetings by Ames).
It was scheduled from Wednesday morning through Friday noon. The following is a brief outline of the events by day:

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Day 1—President’s welcome and conference charge, discussion of the process and expected outcomes, discussion of core values and SWOT analyses, and dinner (including an outside guest speaker).
Day 2—Presentation of the environmental scan and emerging trends, presentation of the
“Key Vision Themes”, guidelines for envisioning the future, creation of vision “ideas” for each area, prioritization of vision ideas, and dinner.

At one point in the process, participants voted on the areas they felt were most important overall using multiple colored sticky dots that they could allocate in any way they wanted. A draft “University-wide Vision Statement” was produced by a member of the
Steering Committee during Day 2 for presentation to Summit l teams the following morning. Based on the logic of the need for more focus, the consultants and Steering Committee considered the sticky dot voting, the priorities established by each vision team, and the Day 2 discussions. They consolidated the original twelve vision focus areas into six.
According to a faculty member on the Steering Committee:

“We identified some different areas of the university, we looked at our current strategic plan, and you know, the important area of focus we thought the university should consider, I think we came up with twelve of those…but instead we decided, I remember, twelve areas were way too many to have twelve different visions and that is where they got consolidated into six areas.”

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As described by another faculty representative of the Steering Committee:

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“They, like, stayed up and wrote and came back with some things to report back, kind of even like the next day before people were dismissed! I remember someone saying ‘Pick out some that really…would resonate with faculty and staff.’”

Day 3—Presentation of the “top vision ideas” and presentation of the draft Universitywide Vision Statement. It was at this point that the six consolidated vision areas were presented to Vision 2020 participants. Day 3 also involved creation of draft Universitywide vision statements by each of the six consolidated Vision Task Force teams (Exhibit
1), discussion of the draft vision statements, discussion of team meeting logistics for the summer, and the President’s closing remarks.

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Table 1
The Original Twelve Vision Teams Combined to Form Six

Combined Team
University Climate and Community

Undergraduate Academic Program; Grad,
Adult and Professional Programs

Core Academic Identity and Academic
Programs

Financial Resources; Student Enrollment

Enrollment, Financial Stability and Educational
Value

Physical Plant; 21st Century Technology

Facilities, Organizational Services and
Technology

Social Programs; Artistic Programs

St. Ambrose in the Community, Society and
World

Catholic Identity; Physical Program

Mission, Values and Catholic Identity

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Original Teams
Academic Resources; Organizational
Excellence

Source: Sally Crino, Vision 2020 Project Coordinator.

Exhibit 1

Exhibit 3
Draft Vision 2020 Statement—Summit 1

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Draft Vision 2020 Statement—Summit 1
In the year 2020, St. Ambrose University is recognized as a premier Catholic institution of higher learning in the Midwest, dedicated to the development of the whole person—mind,
In theand spirit. Building on nearly 125 years of academicaexcellence, St. Ambrose fosters a body year 2020, St. Ambrose University is recognized as premier Catholic institution of higher learning in theeducation, dedicated to the development of the whole person—mind, body personal approach to Midwest, preparing students to enter professional careers and to and spirit. Building on nearly 125 years of academic excellence, St. Ambrose fosters a personal provide moral and ethical leadership and service to their community. St. Ambrose graduates approach to education, preparing students to enter professional careers and to provide moral and are people of integrity, competence and innovation. They are knowledgeable, critical thinkers ethical leadership and service touniversity is knownSt. Ambrose graduates are to the needs of a who contribute to society. The their community. for creatively responding people of integrity,competence and innovation. They are knowledgeable, critical thinkers who contribute changing world while continuing to embody our core values and liberal arts tradition. to society. The university is known for creatively responding to the needs of a changing world while continuing to embody our statement was producedarts members of the Steering
[Note: This draft vision core values and liberal by tradition.
Committee based on input from the consolidated Vision Focus Task Force teams
[Note: This draft vision statement was produced by members of the Steering Committee created during Summit 1.] based on input from Vision Focus Task Force teams created during Summit 1.]

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The Threatening Loss
The recent meeting which Sally turned over in her mind was Summit 1—a meeting of more than
300 visioning participants—and the Steering Committee’s discussion of where they were in the process. This big meeting was a milestone because it was intended to provide feedback and at least some feeling of progress to the participants after all the reading, listening, thinking about the future, and chewing over what the future should look like. Summit 1 was designed for a broader sharing of ideas among the Vision Focus groups. Since these groups were designed to provide evaluation of ideas and input for the vision based on their particular areas of expertise and concern, this was a chance to pull some very diverse areas more closely together by identifying overlapping areas and commonalities.
While this was part of the process to develop converging views of the university’s future, there were some losses along the way. One team member had already lamented the loss of contributions and the specific identity of the group with which he had labored for some time:
“We got toward the end and there were, I don’t remember how many, but there were five or six main categories that the process, that Vision 2020, was covering.” He then indicated that his particular group was not seen as one of the “keys”, feeling that his group was “thrown in” with another which had been studying an entirely different area.” While he appreciated the need to merge and streamline ideas, he also felt a loss:

“I felt that diminished many, many of the discussions that we had had….At the end, I think we had, we had 15-20….we ended up with a group of 50-60 people….I didn’t quite understand what the reason was for merging us with them, other than we had to funnel all, everything, into a much tighter summarization…. I think that we were all kind of shocked. ‘Whoa, this is going to be difficult now for us to have impact’ you know, even though there were differences of opinion between the insiders and the outsiders, at least we all kind of came to the consensus, ‘well if this is what our group has decided, OK’.”
A Steering Committee member recalled it this way:

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“I think what we brought back was what we were asked to do, which was one piece of the puzzle in 2020. And you know, what could…Team Art do? What could our category do in order to [be] a principal player? It, it lost some of that in final stages, which I don’t think we were as involved in.

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Another commented:

“And there were some frustrations in whittling ideas down, that sifting process. Because it seemed that, I had the sense that others were making the choices about, you know, what were the most important things, what were the elements rather than taking what we had said should be looked at or were most important…To an extent there was a lot that got lost in that process.”

When prompted to elaborate on what he meant by “lost in the process” he said, “I think there were activities that seemed to be good ideas that suddenly didn’t fit in the right slots.” He went on to say, “Like I said, were just forgotten or overlooked or whatever. I’m not saying it was arbitrary, but you know, I said things were lost in that process.”
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The Summit 1 meeting of more than 300 was packed into the best space on campus the
University had for large groups at the time—the cafeteria. One participant suggested that
“maybe that helped underscore the need for facilities to be a part of the vision, at least!”

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Clearly twelve focus areas were too many for a meaningful university vision statement. Sally and the Steering Committee, and certainly Steven Ames, all knew that going into the process.
Had they made a mistake in starting with twelve areas of concern and then trying to meaningfully consolidate them? Sally knew there were already “casualties” among the participants. But what could they do now so that, in the end, people who were not already disenfranchised would continue to support a more tightly defined vision? This was the essence of Sally’s dilemma.

Even the Steering Committee members were not in complete agreement on expected outcomes and how to get there! There were differences in opinion about how well things were going, what to change going forward, levels of support among various constituents and, most importantly, how to influence them. In Sally’s words:
“The most important decision was how to converge ideas that sprang up, how to develop a cohesive tapestry, how to take what had been generated and submitted and make it a workable, focused vision. The Steering Committee observed a lot of crossover among the ideas that were generated. This was affirmed as a “good thing” by our chief consultant. But we wanted to be able to come up with something that would represent all of the teams and to be able to trace each idea (in the revised document) back to each team—so they could see their work and to receive credit for it. How to do this was the big decision after Summit 1.

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After turning all of this around in her mind, Sally was now gaining some focus on the origins of her anxiety: How could they bring together all of the ideas that had been captured without losing the ones people thought were critical? How could they make sure all of the teams who had given so much received credit and satisfaction for their efforts? And above all, how could they weave together the cohesive tapestry, a workable, focused vision that was their target from the very beginning? Page 22

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APPENDIX A
University Background
St. Ambrose is a private, coeducational, liberal arts university affiliated with the Roman Catholic
Diocese of Davenport. The University is a community focused on developing students
“intellectually, spiritually, ethically, socially, artistically, and physically to enrich their own lives and the lives of others.” 1

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Historical Milestones
Founded in 1882 by the Rev. John McMullen, the first bishop of the Diocese of Davenport, to serve young men as a seminary and a school of commerce.
Locust Street campus established July 5, 1885 with the dedication of Ambrose Hall.

In 1927, St. Ambrose was admitted to the North Central Association of Colleges and fully accredited. In 1968, St. Ambrose became fully coeducational.

In 1969, the board of trustees was expanded into a board of directors that included lay people. The master of business administration program was Ambrose’s first venture into graduate education in 1977.
In 1987-88, St. Ambrose adopted a three college organizational structure, and became a university. In 1997, St. Ambrose established its first doctoral program, the Doctor of Business
Administration.
Student Profile (as of Fall 2000)
Statistics from the last 10 years on the Institutional Research website:

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All students
Enrollment: 3011
Full-time: (62%) / Part-time: (38%)
Undergraduate students
Enrollment: 2116
Full-time: 1582 (74.8%) Part-time: 534 (25.2%)
On-campus residents: 986
Minority students: 7.1 percent of students identify themselves as belonging to a minority group
Average ACT of incoming students: 21.8
Average High School GPA: 3.1
Graduate students
Enrollment: 895
Female: 565 / Male: 360
Full-time: 286 / Part-time: 609
Significant Campus Construction / Present Purpose
1885, Ambrose Hall / Administrative and faculty offices, classrooms, student center

1

From the St. Ambrose University mission statement.
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1922, Davis Hall / Faculty offices, student residence
1930, Lewis Memorial Science Hall / Faculty offices, classrooms (totally renovated in 1991)
1941, McMullen Hall / Faculty offices, classrooms (totally renovated in 1997)
1952, Christ the King Chapel / Campus chapel
1961, Rohlman (formerly East) Hall / Student residence (totally renovated in 2001)
1967, Hayes Hall / Faculty offices, classrooms, computer lab

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1969, Cosgrove (formerly South) Hall / Student residence, administrative offices, computer lab 1971, Galvin Fine Arts and Communications Center / Fine arts auditoriums, Catich Gallery, faculty offices, classrooms, television and radio studios

1983, Lee Lohman / Physical education center, athletic facilities, faculty offices, classrooms
1990, Townhouses / Apartment-style student residence
1996, O’Keefe Library / Library, computer facilities

1996, Tiedemann Hall / Suite-style student residence
1997, Bookstore and Coffee House

1999, Conference and Continuing Studies Center / ACCEL, Professional and Educational
Development offices

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2000, Hagen Hall / Suite-style student residence

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Appendix B
Definitions of “Vision”
Vision is: a force; the stimulation and management of the flow of energy and meaning that people use to control change (Smith, 1996 a, 1996b; Snyder and Graves, 1994).

•

an ideal and unique image of the future (Eccles, 1994; Kouzes and Posner, 2002; Nanus,
1993).

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an evolving phenomenon appealing to motivation and values (Tichy and Devanna, 1986).

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an over-arching concept that embraces the organization's values, guiding philosophies, and tangible image (Collins and Porras, 1997).

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a calling that is personally mastered and utilized to align the personal and professional aspects of an individual's life (Senge, 1990).

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(provides) a clear sense of direction, a powerful mobilization of energy and it provides the individual with the sense of being engaged in something important (Goodstein et al., 1993).

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•

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Source: The definitions are drawn primarily from McGivern & Tvorik (1998), Vision driven organizations: Measurement techniques for group classifications, Management Decision 36(4),
241-264.

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Appendix C
St. Ambrose Organization at the Time of Vision 2020

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BOARD OF DIRECTORS

PRESIDENT

PROVOST &
DEAN OF
FACULTY

VP - FINANCE

VP- CAMPUS
MINISTRY

RECTOR OF
SEMINARY

DIRECTOR PERSONNEL

DEAN & AVP
– STUDENT
SERVICES

Director- Comm. & Marketing

Director- Recreation &

Director- Planned Giving
Director- University Relations
Director- Annual Giving

Director- Student Health
Director- Counseling
Director- Student

Director- Annual Giving
Director- Development

Director- Residence Life
Director- Campus Safety

Director- Alumni & Parent Relations
Coordinator- Prospects Research

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VP- Institutional Research
Intramurals
AVP- Academic Affairs
Dean- Coll. Of Business
Dean- Coll. Of Human Services
Activities
Dean- Coll. Of Arts & Sciences
Dean- Enrollment Management
& Security
Dean- ACCEL
Director- Library
Director- Financial Aid
Director- Admin. & Acad. Computing
Director- Records & Registration
Director- Upward Bound
Chair- Acad. Support Center
AVP- Finance
Director- Physical Plant
Manager- Bookstore
Manager- Post Office
Switchboard Operator

VP –
UNIVERSITY
RELATIONS

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The Death of a Salesman Revisited
Part A 1
Herbert Sherman, Long Island University – Brooklyn Campus
Daniel James Rowley, University of Northern Colorado

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Gerald Mahoney was talking with his friend Stephen Hodgetts about a new job offer. They had been friends since childhood and now in their early 50’s Mahoney and Hodgetts were as close as brothers. Hodgetts, at least from Gerry’s perspective, was being absolutely no help at all; in fact, he was making matters worse! Gerry had asked for Stephen’s sage advice and counsel and got instead: Hmmm … I really do not know what to tell you Gerry, this is a tough one. Both of my kids are out of the house; one working, the other in College. That puts me in a very different situation than you are in, you with a three year old daughter and all.”

The silence on the other end of the phone became deafening – maybe, Gerry thought, Stephen’s cell phone hit a dead spot? Gerry took a long pause and replied:

Come on Stephen. You always have something to say about everything! How could you not have any advice for me on such an important matter as me switching jobs? Do I take a chance and take a straight commission job with a great potential for making big bucks or do I stay with a job that, because of the change in commission structure, I can barely afford to keep though it provides a very low guaranteed base salary? I’ve had straight commission jobs before but that was when I did not have a family to support and I really did not care about how much I earned from week to week. You know that I’m now the sole bread winner for my family of three, so what should I do?

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Background of Gerald Mahoney
When Gerald turned 50 years old a few years ago, he started to wonder what had happened to his life. As a bright college kid from New York City, he felt he would take the world by storm, first through his musical and comedic talents, and then by being a super salesman. Neither plan seemed to work out. While he had several gigs as a member of differing musical groups and had worked the comedy clubs on Long Island, New York and Manhattan, he never really made a name for himself. His career in sales wasn’t much better. First starting out selling condos, he then shifted from retail sales job to retail sales job, never staying more than a year or two in one place and never becoming more than a store manager. However, his lack of real success never bothered him since he only had to care about himself and his needs were few.
In terms of his personal life, he had dated several women unsuccessfully, married one and quickly obtained an annulment, and never found a reason to settle down and to find a good paying job. Then, through a series of what he calls “unfortunate events”, he met Adrienne and became a father to be, with the eminent birth of his daughter dramatically altering his life. He quit his job working as a store manager in a vacuum cleaning store on Long Island to join
Adrienne, his common law wife, who lived several hundred miles away in upstate New York with her mother. He took whatever job he could land, a shoe salesman’s job in Foley’s, a retail department store, and was paid far less than his store manager’s job. After the birth of his daughter, Gerald and his family moved thousands of miles to Kentucky to be near Adrienne’s

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sister. Gerald found it was very easy to transfer his job to another store in the Foley’s chain and found himself once again selling shoes, but in a much warmer climate and in a much larger store.

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After a few months living in Texas it became apparent that his job selling shoes in a department store was no longer acceptable since he could barely afford sustain his family on his retail sales commissions. Money from his family and friends had dried up, as well as Adrienne’s bank account and he was forced to admit that unless he changed jobs, his family was going to have to apply for family assistance. He started applying for jobs on the internet and through the newspapers, started going on interviews, networked through his family, friends, and customers.
Taking a Step Back In Time: How the Stage was set for a Job Change
Gerald quickly realized, once he and his family moved to Kentucky, that living in Kentucky
(although certainly cheaper than living in New York City) was not going to be as cheap as when he was living under someone else’s roof in upstate New York. Besides now paying rent for a two-bedroom apartment, Gerald had had to dump his old jalopy in New York when he went to
Kentucky and found that he had to buy a good car on credit – he now had car payments where before his car had been paid off.
Secondly, raising a child, even with government assisted medical insurance, was no light expense and Adrienne had to stay at home, a loss of potential income. She did baby-sit, from time to time, but this income was minimal and unpredictable. Bills outstripped his salary and if it weren’t for the charity of family and friends, he and his family would have become destitute.

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Third, selling in his new store in Kentucky was far more competitive and variable than in upstate
New York. As the newest salesperson Gerald had one of the worst schedules (he was off at least one Saturday or Sunday a week, the biggest selling days), had to develop a customer base from scratch, felt like an outsider, and was being out hustled by the more seasoned veterans who knew the market and better understood the needs of the customers in that region of the country. The other salespeople were also less than helpful to newcomers and had a very bad habit of stepping on his sales by taking customers away from him while he was servicing other clients. Seasonality was less of an issue in an area that much never got below 50 degrees in the winter, and shoe sales seemed far more sporadic and uncertain. Since his salary was commissioned-based, his unpredictable sales led to a high variance in his weekly paycheck since there was no minimum salary. A

After just a few months on the job, Gerald read in the local newspaper that Foley’s (a subsidiary of Mays Department stores), was being acquired by Macy’s West, a subsidiary of Federated
Department Stores. He first worried about his job but was told by the department manager that
Foley’s would merely adopt the Macy’s name and logo after a year or so and continue to offer the same products and services and therefore retain all of Foley’s employees. He thought nothing of it at the time and went back to work.
It was a year later in 2006 that Gerald would finally experience the impact of the changeover from a Foley’s to a Macy’s on his sales and commission. Historically, customers who shopped at Foley’s for shoes wanted discount prices with a retail experience, a “more for less” or valueadded philosophy. Gerald was used to dealing with this type of customer from his former job since this customer was not very demanding of service but very price conscious – when shoes

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came on sale they bought quickly and big and were not very demanding in terms of style and colors. The Macy’s customer, however, was far more demanding in terms of service and quality, and therefore Macy’s shoe product line was a step up in price and features. These customers wanted to be pampered more and took far more time to make a decision about which shoe to buy
– salespeople had to wait on them hand and foot in order to complete a sale. The bottom line was that Gerald sold far less shoes in volume and fewer shoes in overall revenue with the Macy’s line that he did with the Foley’s line, and he was not alone.

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The straw that broke the camel’s back came a few months after the store’s name and shoe product line switched. A huge meeting was called in the department by the department manager and many salespeople and stock clerks thought that the worst was going to occur – people were going to be fired because sales were down. Rather than firing people, however, management opted to reduce the sales commission on shoes by 50% while ensuring a minimum base salary.
They also forbid salespeople from going into the stock room and getting their own inventory – only clerks were allowed to handle inventory and to be in the “back room.”
This was certainly a major blow to the super salespeople in the department, who realized that they would have to sell twice the volume to make up the commission loss, while having far less control on the timing of that service since they would have to wait for assistance from the clerks in order to service their customers. Waiting time was a critical factor in retail sales and the longer a customer had to wait, the greater the likelihood that a sale would be lost. Since Macy’s was offering a higher quality shoe to a more demanding customer, service was a very critical component and needed to be enhanced, not devalued. Although many of the salespeople at the meeting objected to this change, the department manager was insistent and indicated that this was a new working condition associated with the clerk’s new union, a union which had just signed a contract with Macy’s. 2

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Gerald felt that the writing was on the wall for him, given the new commission system and his dependency on clerks to find the shoes that his customers needed. He had finally put some good weeks together to make a decent commission and a living wage and knew that he could not continue this sales pace under the new pay system. And the minimum guaranteed salary was not enough to support his family. He decided then and there he just had to leave the job, but what could he do that would earn him more than what he was earning now?

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Gerald reached out to several of his friends and family members to see if they had any connections he could use in order to get a job. Most of the referrals immediately lead to dead ends since he had neither the background, education, nor experience in which to even apply for whatever positions were available. The one job he did apply for, a pharmaceutical salesperson was far more complex than he anticipated and it was clear to Gerald during the interview that he was not the right person for the job. He certainly seemed to be correct in his judgment since no job offer was forthcoming. He felt powerless, hopeless, and accepted his fate in a very disgruntled manner. Yet, for all of his hard work and effort in finding a new job, he could not find a job that would pay him substantially more that what he was currently making. And then one day “she” walked into his store and his life would never be the same again.

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Selling the Right Pair of Shoes to the Right Person
It was a day like any other day for Gerald Mahoney yet Gerald was to look back at this day with both pleasure and regret. He was working in the women’s shoe department and doing the best that he could to sell a fairly expensive pair of boots to a young lady who obviously could afford to shop at a much classier store such as Nordstrom’s or Neiman Marcus, yet, for some unfathomable reason, decided to bestow her good graces on Macy’s. Gerald must have gone through every boot in her size, based upon the piles of boxes of boots that needed to be repacked in the back room, and yet nothing he could do persuaded her to buy a pair of boots. He had reached his limit with this customer but something inside him would not allow him to give up.
He screwed up his courage and decided to take what he thought at the time was a very bold move. Excuse me miss but I couldn’t help but notice that I’ve been assisting you for the past hour and I didn’t even ask you your name. Would you be so kind as to share it with me?

She hesitated for a moment and Gerald thought he had blown the sale. He was cursing himself under his breath when she briefly replied in a very business-like manner:
My name is Maggy Monahan and by your name tag I assume your name is Gerald Mahoney.

After a few more minutes of trying on several more pairs of boots, Gerald was able to gently persuade Ms. Monahan to buy one of their most expensive products. He rang up the sale and was complimenting himself on his persistence when out of the blue Ms. Monahan said:
Now that I have answered your question, and you have sold me a pair of your finest shoes, would you answer one for me?

Gerald went from happy to apprehensive and thought “what could this woman possibly want to know from me?” Before Gerald could reflect more, Ms. Monahan quickly blurted out her question. LL

Why is an obviously highly talented man like you, who has just sold me a pair of shoes I probably don’t even want or need, working at a place like Macy’s? I am the Director of Recruiting and Training at ABC
Home Builders and I can tell from the way that you have handled this sale that you would make a superb homes salesperson. Here’s my card. Why not call me tomorrow morning and we can arrange a time for you to come in. Our website is also on the card so feel free to check us out and see our job listings.

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Gerald thanked Ms. Monahan for her kind words and told her he certainly would call her in the morning and arrange for an appointment. “Perhaps this was the one break I needed all my life” considered Gerald. “Perhaps now, I can do the right thing for my family and myself by working in a good job with good pay and benefits. Homes are big ticket items and I am sure that I can make a really good commission by selling just one home.” Gerald got home that night, told
Adrienne of his little adventure, and immediately checked out ABC Home Builders’ website.
Job Advertisement for Sales Counselor
ABC’s job advertisement on their web site for a sales counselor, as far as Gerald Mahoney was concerned, seemed very straight forward and exciting. See Exhibit 1 below.

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EXHIBIT 1
CAREERS AT ABC HOME BUILDERS 3

At ABC Home Builders, we have a simple philosophy:
“Building Homes Right the First Time, Every Time”

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We know that special feeling a new homeowner gets when they walk into their brand new house, a house that not only meets but exceeds their expectations. A house that now is their home. It is that feeling that has launched us into a major leader in the homebuilding industry. What do offer a possible member of this winning team? We provide excellent pay, benefits, and real growth opportunities to the most capable individuals who can build their careers as we build our customers’ homes.

Go With the Best

ABC Homes Builders is looking for talented individuals who have the motivation and skill to excel at their work. Although being a self-starter is important, we know that it is not as easy as “ABC” to build a winning team and we are therefore looking for high caliber sales associates who can support a team effort. We provide a lucrative compensation package including comprehensive healthcare, 401K, advancement opportunities, and a constructive environment contributing to realizing success.
Description: High amount of energy and dedication an absolute must, outstanding public relations and organizational skills, a burning desire to succeed, and strong customer focus. No real estate experience required.
Requirements:
Weekends a must!
Education:
Previous sales experience preferred.
Location:
Louisville or Lexington, Kentucky
Contact:
Recruiting and Training Department
To Apply:
Email Resume to: Recruiting and Training Dept.

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Please reference Job Code ABCD1234

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Gerald was ecstatic about the prospect of selling homes again, although his previous experience selling condominiums was not necessary (although it would seem to be a plus) in terms of the job requirements. He seemed to have the right background for the job and he had always wanted to work in a job environment where he would feel like an integral member of a team. He perused the firm’s website further and did some research on the firm before he called up Ms.
Monahan to set up an interview (see Appendix A, ABC Home Builders LP).
Getting the Interview: Persistence and Pain
Gerald called Ms. Monahan the next day as he promised and she seemed quite receptive to his call. She asked him to FAX over a resume and that she would get back to him (or her assistant

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would), in order to set up an appointment for him to interview with her and some of the key salespeople in the firm.

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Gerald had an old resume which he looked over to see if he could polish things up and make his background more attractive. One thing was clear looking at his resume, that he barely stayed in one job for more than a year or two and that when he did “jump ship” that it was not necessarily for a better job or for a better career opportunity. This career path perplexed him to no end and he wondered how he would explain it if the issue were ever raised during his job interview. He decided, after a day or two of brooding about it, that honesty was the best policy and that he would explain how his life had changed for the better and that he had found the ambition that he had lacked most of his life. He wasn’t necessarily happy with this answer but felt that it was the best way in which to deal with the obvious – that he had a mobicentric personality 4 (never stayed in one place very long) and now was finally settling down.
Gerald ended up FAX’ing his resume three days after he had talked with Ms. Monahan and waited for the inevitable phone call – however, it never came. He wondered if he should call her and verify if she had received his FAX or not, and finally did after Adrienne persuaded him that he should at least follow-up and find out what had happened. After several days and unsuccessful attempts to get Ms. Monahan on the phone, her assistant did confirm that his resume was received and that they would be getting back to him about setting up an appointment. In the interim, all was not going well at Macy’s. Sales continued to be slow and although Gerald did have some good selling days (as he would say, it didn’t take much to have a good day since the shoes were far more expensive than Foley’s), his paychecks continued to be quite low and his family’s economic situation was worsening. He needed a new job with decent pay and he needed one now! He continued to call Ms. Monahan’s office once a day and after a week of calling he finally received an appointment for the following week for an interview. He thanked
God for the opportunity to better himself and went into the interview both excited and nervous.

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The Interview Ordeal at ABC Home Builders
Gerald was overwhelmed by ABC’s interview process and felt that he had just gone through a wash wringer. Having changed jobs every year or two, Gerald thought he knew what to expect during an interview since he had been through so many. Usually he met with a store manager or the head of personnel for about an hour and they would ask him questions about his previous employment, why he left his last job, and why he wanted to work for their firm. These were routine questions which inevitably lead to a discussion of salary (if they thought he was qualified to do the job) and a job offer. Yet ABC’s interview process was a whole day event and far more complex. It all started at 9 AM. First, before he met with anyone, Gerald took a battery of exams and filled out a set of questionnaires. The exams included everything from basic math questions
(which he hadn’t done since his college days, nearly 30 years ago), to what seemed to be an IQ test, to questions about self-image, and to his preferences about the type of work he liked to do.
For three hours he sat in this little interview room, quite alone, and felt that his mind would eventually turn to mush. They gave him a short lunch break (1/2 an hour in a small lunch room

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with just food vending machines) and Gerald wondered was the job really worth this heartache and grief. He thought of his daughter every time a negative thought drifted into his head and decided to continue.

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The afternoon was much better. The fact that he actually received an interview after all of the psychological tests he had received lifted Gerald’s spirits – perhaps he had a chance to get this job after all! His first interview seemed to set the tone for the rest of the day. Gerald had a wonderful interview with the Sales Director, Sam Arden, and found Sam’s easy going, laid back style a refreshing change of pace from the usual sales people he had dealt with most of his life.
Sam, after telling Gerald a little about the firm and about the homes sales market, asked Gerald a little bit about his background and sales history and what made Gerald special enough to become an ABC sales associate. Gerald expected these questions and was quite prepared.
The next series of questions, however, were very different than anything Gerald had experienced during an interview and he found this approach very positive and exciting. Sam would tell him a little story, Gerald assumed a hypothetical situation of sorts, and then ask Gerald what he would do or say if he were the manager or sales associate in the situation. No one besides a customer had ever asked Gerald’s opinion about anything at his prior jobs and Gerald felt that he had finally found a firm that cared about what he thought and was willing to listen to him. Gerald sailed through these scenarios, he thought, with flying colors and Sam’s tone was always very positive throughout the interview. It was 3 PM when Sam finally called an end to this session and Gerald felt invigorated and ready for more.
The next set of interviews was rather strange to Gerald but he was in such good spirits that nothing could deter him. He walked into a small conference room where three people who identified themselves as area managers and one person from personnel asked him a series of questions about his selling approach, work habits, and his ability to work with a sales partner.
This session lasted an hour and was repeated in another room with another three area managers and another person from personnel. At 5 PM the session ended and Sales Director Sam Arden, walked in and told Gerald he would call him in a week to let Gerald know the firm’s decision.
Gerald at that point was quite tired but elated, thanked Sam for the opportunity to interview for a job with Royce, and said he looked forward to hearing from them. When he got home he took a long bath, crawled into bed, and had the most restful sleep he had had in months.

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Waiting for Godot? 5
The next week seemed like an eternity. Every day Gerald hoped to get a call from ABC telling him the job was his, and every day he was disappointed when the call never came. “I know I aced the interviews,” thought Gerald to himself as he was assisting an older woman try on a pair of finely laced shoes, “so what is taking them so long to make up their minds?” Gerald became so fixated on the expected call that his attention to his job was waning and his sales numbers dropped precipitously low. His manager actually tried to help him make a sale or two (“was it out of pity or disgust,” thought Gerald) and get him out of his slump but Gerald became quite morose and despondent. Gerald felt like a young kid on a car trip asking his parents “are we there yet, are we there yet” – even a “no” would have been better than the waiting and the uncertainty. Page 33

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A week went by and Gerald had not heard anything from Sam’s office. Self-doubt was setting in and Gerald was quite on edge. He was debating with himself whether he should play it cool and just waits for the phone call or whether he should take the initiative and call them. He did not want to seem overly anxious yet at the same time he did not want them to think that he wasn’t interested in the job either – what a conundrum! After two more days of indecision, Adrienne insisted that Gerald find out what was going on or he should be prepared to sleep on the couch until he got an answer. Gerald immediately called and was told that a letter was in the mail to him and he should await its arrival.

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The Letter
Three days later, and with continued impatience at work and at home, Gerald received the destined letter. The first word he read “congratulations” sent Gerald into an ecstatic frenzy. He danced with his three year old daughter, hugged Adrienne, and had a grin from ear to ear. He called his Stephen to share the good news, called his mom, brother and sister, and was about to call his boss at Macy’s to resign when Adrienne called his attention to the terms of the offer.

“Hold on a minute” Adrienne exclaimed. “Have you seen the terms and conditions of your employment?” Gerald put down the phone and walked over to Adrienne and then read the letter slowly and carefully. “Hmmm” mumbled Gerald “this was not exactly what I had in mind.”
Three thousand a month for the first three months is much more than I make now but after that the job is commission only, starting at 1.5% and goes as high as 3%. If the average home is about $150k and I sell one home a month I’d make $ 2250/month, about what I’m making now.
Assuming that medical and dental packages run about the same cost and that coverage is the same, I’d lose paid vacation time but perhaps gain in terms of their contributions to a 401(k) plan. Doesn’t sound that great a deal to me!”

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“But wait a minute” replied Adrienne “you certainly could sell more than one house a month. If you just sell two homes a month you’re making $4500/month, that’s $54k a year, more than double what you’re making now! You have no chance in hell to make that type of money at
Macy’s; in fact I bet even the top sales people in your department don’t bring home that type of bacon!” “I don’t know about that” Gerald responded “but I do know that the new commission system at Macy’s makes it all but impossible for me to really make more that $30,000 a year. I just don’t seem to have the knack of selling Macy’s higher priced shoes.”

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Gerald let this all sink in as he took a walk to clear his head. This was an important decision in his life and he needed to think about it. “Adrienne has a point,” Gerald told himself. “I really can make very good money selling homes whereas selling shoes is a dead end job – especially with what Macy’s has been doing lately with my commission. However, what if I don’t sell any homes after the third month? At least at Macy’s I have a guaranteed salary, low as it may be, if I have a bad month; there are no guarantees with Royce. If I were living on my own there would be no doubt in my mind that I would take the ABC offer, but I have a family to think about and I need to make sure that the money continues to flow.”
Gerald knew that he would have to decide whether or not to take this job offer since his training program would begin in just two days. As he continued his walk, he decided to call his family

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and friends with his cell phone to discuss the matter further. (A tabular time line of events in this case is presented below, see Exhibit 2.)
EXHIBIT 2
TABULAR TIME LINE OF EVENTS

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1. Gerald works as a salesman, plays in musical groups, and does standup comedy on Long
Island, New York.
2. Gerald meets Adrienne, she becomes with child, and he moves to upstate New York to be with her and works at a Foley’s department store selling shoes on a commission only basis.
3. After the birth of their child, Gerald and Adrienne move to Kentucky and Gerald is arranges transfer to a Foley’s in Kentucky.
4. Macy’s acquires Foley’s and introduces a more expensive, higher quality shoe product.
5. After a few months, Macy’s reduces commissions by 50% but introduces a low but guaranteed minimum salary.
6. Gerald realizes that he cannot, under this compensation system, earn enough money to properly care for his family and decides to look for another job.
7. Gerald assists Ms. Monahan, Director of Recruiting and Training at ABC Home Builders, in a shoe purchase, and she suggests that he apply for a sales position at ABC.
8. Gerald looks at the job description on-line then Fax’s in his resuming and awaits a reply.
9. Through persistence, Gerald obtains an interview.
10. Gerald goes through a rather intensive interview process and, after waiting a week and then making a call, receives a letter from ABC with a job offer.
11. Gerald calls his friends and family, and specifically his good friend Stephen Hodgetts, for advice and counsel.

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APPENDIX A
ABC HOME BUILDERS LLC 6

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With headquarters in Louisville, Kentucky, ABC Home Builders LLC builds entry-level and move-up homes in the Louisville, Lexington, and Florence Kentucky. The company's four divisions build under the names Settler Homes, Boone Homes, ABC Home Builders, and Elegant
Homes. The homes range in size from about 1,000 sq. ft. to over 6000 sq. ft. and in price from the $90,000s to the $600,000s. ABC Home Builders offers design services through its design center, and it also provides mortgage services through affiliate Eloquent Financial. The company has built more than 16,000 homes in more than 40 communities since it was founded in 1980.
The company’s website notes that ABC Builders is one of the most successful home building companies in the region. ABC Builders ranks among the top 30 privately held builders in the country and stands firm as one of Louisville's most respected. With nearly 10,000 satisfied customers living in ABC Builders homes, our track record speaks volumes.

Each division of ABC Builders operates under the principles of success that have been with the company since its inception. With ABC Builders, you will find ‘Your Idea of a Home.’ This means that your builder will listen to your needs and wants to help you live the life you've been dreaming. You can feel confident in your investment because your home must pass extreme levels of scrutiny before you move in.
All ABC Builders homes receive the detailed review of a team of qualified construction personnel, third party inspectors and the final acceptance of the one-of-a-kind ‘Helping Hands’ customer care team.
The Four Divisions

ABC Builders accommodates individual buyers’ needs, whether they are a first-time home buyer, a growing family moving into a larger home, or empty nesters ready to downsize while keeping their idea of a classic home. There are four divisions of ABC Builders offering new homes from the $90s to the $500s.

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Settler Homes $90s to $170s

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Settler Homes makes dreams come true. We make it easy for the dream of home ownership to become a reality. We have developed flexible financial programs that fit your budget while providing a quality product you can be proud to call your own
Settler Homes, the homes that dreams are made of.
Boone Homes $120s to $300s
Life is all about alternatives and our ability to make choices that make the most sense to us.
Boone Homes helps you make the right choice for your home by carefully paying attention to you, our clientele, and understanding that every buyer has different needs and tastes. That's why we at Boone take pleasure in taking note of your ideas, considering your financial situation and serving you by designing the right home for you. Boone offers mid-quality, custom homes where

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you obtain an outstanding value because you pay for only the features that you want. Boone
Homes truly cares about your needs and your vision of becoming a homeowner. Yes, life is all about making the right choices and the first choice is simple; start talking about your idea of a home with us, we are always listening.
Boone Homes, The Best Value with First-Rate Service.
ABC Home Builders $160s to $420s

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ABC Home Builders has more than 20 years of experience in the Louisville area. An ABC Home offers better-quality manufacture standards, wide-ranging floor plan choices and an assortment of interior and exterior features that permit homebuyers to tailor their home to fit their lifestyle.
With numerous locations, ABC Home Builders offers folks like you many prospects to find their idea of a home.
ABC Home Builders. Your Inspiration, Our Expertise.
Elegant Homes Over $450k

Striking floor plans present the optimum in unique and extraordinary looks and designs. By providing an assortment of selections, Elegant Homes guarantees that each home replicates the owner’s individual taste and personality. Home designs range from 3,200 to over 6,000 square feet. Customer Services

ABC prides itself as being a one-stop shop; we provide customer assistance from property location, to after closing service. Our Home and Design Centers allow the customer, from one central location, to review community locations, floor plans, and pricing while also providing customer decorating experts who help the customer make effective design decisions. These consultants are educated and expert about fashion and contemporary trends, and they can help homebuyers appreciate what products and color arrangements will compliment their new home.

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Eloquent Financial makes in-house financing quick and easy; we offer complete financial services and a wide assortment of loan packages. A handy loan application is taken on-site or by web, phone, fax, mail, with loan programs calculated to meet customers’ specific needs, with competitive products and interest rates. All services related to the loan (underwriting, appraisals, closing, and marketing) are provided in-house.

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Even after you have moved into your new home, ABC provides distinct after sales service through its Helping Hands program. By assisting homeowners with proper maintenance of their new home and by allowing homeowners to conveniently schedule and report maintenance items,
(including emergencies to a call center that is open 24-hours a day, 7-days a week, including holidays), this program ensures many happy years of care-free living. In addition to warranty services (this program is included for the first year), and for an additional fee, the call center will assign certified professionals to perform and document monthly, semi-annual and annual home checks. Page 37

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Endnotes
1

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This is a disguised case. All the names of characters, firms, and locations have been changed to protect the anonymity of individual and firms directly involved in the case.
2
Frey, Christine (September 9, 2003). “Workers Approve Bon-Macy’s Contract” Seattle-Post Intelligencer.
Retrieved from http://seattlepi.nwsource.com/business/138676_bon09.html, January 2, 2007.
3
This advertisement has been rewritten in order to protect the anonymity of the firm.
4
A person who likes to travel and change jobs for changing sake. See Whyte, W. H. Jr. (1956). The Organization
Man. New York: Simon ands Schuster.
5
“Waiting for Godot” is a play by Samuel Beckett in which the two seeming vagabonds continuously wait for a character named Godot who they hardly know, and they cannot recognize. Godot never arrives yet they await him nonetheless. 6
This is a disguised case. All information in this section has been altered to protect the firm’s anonymity.

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The Death of a Salesman Revisited
Part B 1
Herbert Sherman, Long Island University – Brooklyn Campus
Daniel James Rowley, University of Northern Colorado

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Gerald Takes one Job and Leaves Another
Gerald must have talked and walked for several hours since his knees were pretty sore by the time he got back home. He had received rather mixed advice from most of his friends but
Stephen Hodgetts’ comments in particular stood out. “What have you got to lose” Stephen said
“by taking this job? You can always go back to Macy’s or another low wage job and earn the same lousy guaranteed pay. You know you’re going to kick yourself in the head no matter what you decide to do. You always second guess yourself, so you might as well take the plunge and try out this new job.”
Gerald talked about all what he had heard and thought about with Adrienne and they decided that he might as well roll the dice and try out this new job. For the first time in a long time Gerald was excited about working and Adrienne seemed very supportive of his choice. Maybe this was the one break he had been waiting for his whole life and now was his chance to capitalize on it.
Gerald went to work for Macy’s the next day and gave his manager one week’s notice.
And Now for Something Completely Different
The week flew by and Gerald could not wait to get out of Macy’s and go to his new job working for Royce. Gerald began his five week training program on Saturday and he quickly realized that his weekends would never, ever be his own again. It was not that he never worked weekends for Macy’s but weekends were critical in homes sales and he was told immediately when he walked into the door of the training room that he was expected to be on-the-job every weekend. A

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Gerald felt that first day started off with a bang – after a few quick introductions around the room
(there were ten trainees and several trainers) the trainers quickly outlined the training program.
Saturdays through Mondays he was going to spend with a mentor on-site in one of ABC’s home developments (although this first Saturday was at corporate Headquarters) while the rest of the week (Tuesdays off) would be spent at the corporate office going over policies and sales procedures, the process of home construction, using the personal computer to write up a contract, contacting realtors, and use/placement of signage. Much of the training would consist of canned videos dealing with such issues as new home buyer orientation, closing the deal, and the laws dealing with real estate purchases. The rest of the time would be spent focusing on the real estate salesperson exam, a state exam that would qualify the trainees for selling real estate through a real estate broker. The instruction for the exam included a combination of lecture and self-study. Although this credential was not necessary for in-house sales, ABC felt that their sales associates should be well versed in state requirements and should be as qualified as possible. Page 39

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As the days flew by, Gerald was at first quite impressed with the training program, as well as his first paycheck which came at the end of the fourth week. Never in his over thirty years of work had he experienced such intensive training. Obviously ABC took a particular interest in training their staff and put their money where their mouth was – they were investing in knowledge management. Gerald particularly liked the fact that his ideas and opinions were not shot down during these sessions but were not only listened to but positively commented upon; this reinforced his impression during his interview that sales associates would become valuable members of the ABC family.

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At the end of the fifth week, however, Gerald seemed lost and overwhelmed. “There is just so much to know that I cannot begin to tell you what I know and don’t know,” Gerald told his good friend Stephen. “I’m still confused over home financing options, how to fill out a contract on the computer, how to contact realtors in order to create a large referral network, and a million other detailed items. Let me tell you that building and selling a home is far more complex that selling shoes and rightly so given its high sticker price. I really could have used another three to four weeks of instruction, as well as more hands-on field work. I would have really liked to have done at least one presentation walk-through with a customer and then had a supervisor critique my work – I understand that they do not want to jeopardize a sale but there is only so much you can learn from observation!”
Gerald’s Lot?
The last day of training Gerald, as well as the other trainees, received their assignments. The training manager went out of his way to indicate to the group that Gerald’s assignment (along with a fellow trainee named Christa Gayle), was the toughest assignment of all, a real challenge.
The area that they were going to work in basically consisted of a working trailer (rather than a show home with an office, which was the norm), two incomplete homes that were the most expensive models in the ABC product line, and nothing around the area for miles around; basically a series of vacant lots in an open area without anyone or anything to see for miles around. A

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Gerald was shocked and dismayed. He needed to sell homes, and needed to sell them quickly if he was going to survive after his three month pay period was up. Yet he did not want to make trouble at the meeting. First, Gerald was expecting to be paired up with a seasoned sales person, not another new recruit, yet everyone seemed paired off with a fellow newbie. This seemed counterproductive – how was Gerald going to learn the ABC way to sell successfully if someone who was not a successful ABC salesperson was working with him?
Christa, his partner, seemed nonplused at the idea and chortled when Gerald mentioned it in passing. In fact, she seemed to be beaming with pride! “Obviously we must have done something right during our training session for the firm to have such confidence in our ability to sell homes that they gave us the most challenging location without supervision” Christa remarked to Gerald. “I’ve been in real estate before, so have you, so they must think that our previous experience is a real asset.”
“That’s one way of looking at it” replied Gerald. He was so shell shocked that the normally loquacious Gerald was brief and curt in his comments. Gerald thought, but did not say, that the

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other way to look at the situation was that they put their losers in the worst situations possible in order to weed them out – why not put your best people in the best places since you want to maximize your sales and keep the best people around? He again felt as he had experienced in many other job situations, unappreciated, unmotivated, lied to, and taken advantage of.

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From the Frying Pan and into the Fire
The next day was Gerald’s first day on the work site. Although he left early in order to allow for traffic and getting lost, he still managed to arrive 15 minutes late, a bad omen for the first day on the job. They had not provided him with any directions to the sales office and he managed to miss the turn off for the development several times because Mapquest did not show the turnoff.
Christa was already there and gave him a cold stare as he climbed up the wooden stairs and into the trailer. Gerald was expecting a smile and a good morning from his new partner. “That’s all I need” Gerald told himself “I’m late to work and I have already started off on the wrong foot with
Christa.” Christa had parked herself at the front desk, the one that immediately facing the door and she was going to be the first thing a prospective buyer would see. Gerald realized that
Christa had made a very strategic decision since she would be the first person to greet anyone walking in off the street – out maneuvered! The only other desk in the fairly run down trailer was the one by the back window by the floor and roof samples – had plenty of room to spread out but the desk was so old that Gerald wondered what was keeping it together.
Gerald settled himself into the old desk and proceeded to get familiar with the surroundings. He looked over all of the blueprints on the architect’s desk, examined all of the samples and model floor plans, and read every brochure he could get his hands on. Not a word passed between him and Christa and not a single call from customers or the corporate office. After two hours of getting familiar with his surroundings, and absolutely no sales traffic, Gerald walked outside to look at the two homes that were under construction. Both had their slab foundations poured but no other work had been done – he was basically looking at two holes in the ground with a cement floor for each. No construction was occurring at the site and for miles around there was merely vacant property – no homes, no commercial business, nothing. It looked like someone had dropped a huge bomb and the trailer was ground zero; only thing remaining were the foundations of two homes.

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Gerald went back into the dilapidated office and tried to talk with Christa to see what she was thinking. She was very hard to engage in a conversation until Gerald mentioned his daughter and Adrienne. That seemed to have broken the ice. Christa immediately but briefly mentioned her husband (“that 6’ 4” guy who gets very jealous and says that I can be very intimidating”) and directly became silent. She seemed to be concentrating her efforts on the only computer in the office that was on her desk.
“Damn it” Christa finally said (and it seemed to Gerald, quite out of character) “we have no internet connection. There is only Microsoft Office on the computer and all of the other preprogrammed software that usually comes with a PC, including games, has been deleted. How are we supposed to process sales contracts if we cannot access ABC’s internet site?” Gerald did not have an answer for her and decided to continue to scour the office for additional educational material. He did notice that there was a shelf way in the back of the trailer that seemed to hold

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brochures and stationary. In digging around he did find some sales contracts although they looked wrinkled and different from the on-line form that had been trained with. He shared his findings with Christa who simply shrugged her shoulders – Gerald could tell that she was not going to be fun to work with. The phones at least seemed to work and there was a TV with a built-in VCR by his desk. The TV was playing what seemed to be a canned ABC infomercial – there was no cable hookup, no antenna, and therefore nothing to watch except any tapes they may bring in from the outside.

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Christa and Gerald each took an hour for lunch, staggering their meal time. They needed the time so that they could exit the property, find a restaurant or deli, and grab something to eat. The day continued to drag on. They received two phone calls in a total of eight hours, one from their regional manager Bob Grossman who said he would pop in tomorrow and introduce himself, another from a wrong number. No customers, nor anyone for that matter, showed up at the office all day. The office was supposed to remain open until 7 PM and Christa volunteered to stay until 7 PM even though Gerald had come in late. Gerald figured this was part of her way to try to garner customers and decided to at least concede tonight to her. When he left the office at
5 PM he did mention to Christa that they should alternate taking the night shift but Christa just shrugged her shoulders and said nothing.
If Gerald thought that his drive to work was a long one, his drive home was even longer … or at least it felt that way. He could not imagine a worse first day on the job and was cursing himself for thinking that this job would be any better than any of his other jobs. He thought to himself:
Of all the real estate offices in all of ABC Home Builders’ operations’, I had to end up in this one! I left my stable job in retail selling shoes because I thought that I could make a better living selling homes; you sell one home and you earn thousands of dollars in commissions, what could be easier?

Yet what I have here is a disaster in the making, and I’ve been here just one day! We have no model homes up, we’re in a vacant area with no traffic, I’m in a trailer for a showroom, two homes just starting to be constructed that seem far too expensive for the neighborhood, and no access to the internet or to a television in the office. And look at my desk, if you could call it that! It looks like an antique from a World War Two machine shop. And the worst of all is that I’m working with the saleswoman from hell, the ice princess. She has the personality of a rock and is as vicious and competitive as a rabid wolverine. How can I possibly sell homes in this competitive market, given these working conditions?

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(See Appendix B, The Residential Real Estate Market.)

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Gerald felt like he was playing Monopoly and he had just landed on the square “go to jail.” Yet unlike Monopoly, there were no dice to roll to get you out prison, no get out of jail card, and no way to buy your way out; there was “no exit”. 2

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Appendix B
The Residential Real Estate Market
Although few experts predict that home values will fall dramatically in 2007, many economists say that prices won't improve for 12 to 18 months. And without the cushion of rising home equity, which softened the blow of high oil prices last year and kept consumers buying big-ticket items at a rapid clip, Americans may lose confidence in their finances — and the broader economy is likely to suffer.

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Ambitious building booms in many markets in the past half-decade, combined with mortgage interest rates that have increased about 1 percent in the past year, have resulted in residential real estate stagnation. The gridlock defies conventional wisdom, stubbornly remaining neither a buyer's nor a seller's market.
"We are currently experiencing the worst of the market freeze, which is being exacerbated by the gap between the buyer's desire for bargains and the seller's fantasy of what they once thought their homes would be worth," said Diane Swonk, chief economist for Chicago-based Mesirow Financial, who forecasts a rebound in early 2008. "The good news is that there are some signs of stabilization. The bad news is that a substantial backlog of unsold homes still exists."
Global forces and U.S. monetary policies play important roles in the housing slowdown, which already appears to be depressing the national economy.

The newest forecast by Moody's Economy.com, a private research firm, projected that the median sales price for an existing home will decline in 2007 by 3.6 percent — the first decline for an entire year in U.S. home prices since the Great
Depression of the 1930s.
The Commerce Department reported Nov. 29 that gross domestic product grew at a 2.2 percent annual rate in the third quarter, down from 2.6 percent in the second quarter. The residential construction falloff subtracted 1.2 percent from growth, the department stated.
Peter Morici, a business professor at the University of Maryland, said artificially low interest rates over the past half-decade encouraged China and other exporting nations to purchase 10-year bonds, which kept U.S. mortgage rates low and fueled the housing bubble — despite a gaping trade deficit that should have sapped investor confidence years ago.

"In order to play this Ponzi scheme, the value of the homes had to go up faster than the economy grew and faster than people could service their debt. We've reached that limit," Morci said. "The housing market sustained the economy at a time of very large trade deficits. It's been a false prosperity."
In addition to macroeconomic forces, regional U.S. housing markets faced particular challenges. … "I don't see how the economy can continue with these prices," said Stephen Levy, senior economist of the Center for Continuing Study of the
California Economy. … "We have to work off the inventory," said Daniel Nussbaum, a licensed investment adviser and CEO of Calabasas-based TheUSARealty.com. "I honestly think we're past the worst of it, but if you don't take out your magnifying glass you might not notice." … "It's definitely a friendlier market than earlier this year, but not a dramatically cheaper one," said Zach Chouteau, 41. "People have gotten really spoiled by the rapidly escalating prices, and it seems like they're in denial that things have leveled out. They're just fishing for the best price."

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Excerpted from CBS News Special Report 2006: Year in Review “Red-Hot Real Estate Market Cools Off: Not Much
Improvement Expected In 2007” New York, December 14, 2006. Retrieved from http://www.cbsnews.com/stories/
2006/12/14/2006/main2269107.shtml, December 19, 2006.

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Endnotes

This is a disguised case. All the names of characters, firms, and locations have been changed to protect the anonymity of individual and firms directly involved in the case.
2
“No Exit” is a play by Jean-Paul Sartre and describes how three people react to being locked in a room, presumably in hell, with no windows, no mirrors, and only one door which is locked.

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Customer Service at the Jewish Community
Center
Edward Desmarais
Salem State College
Sandra Sheckman
Salem, MA

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Gina Vega
Salem State College

Thinking she had heard just about every possible critical comment from this particular member of the Executive Committee of the Board of Directors of this nonprofit organization, Doris 1 , the
Executive Director cringed as Lacey presented her with yet another issue:

“And instead of getting up and showing the person where the information was, she just sat there and pointed. She didn’t move more than her finger,” Lacey, a long term member of the Jewish
Community Center (JCC) and currently a member of the Executive Committee of the Board of
Directors, complained; “and even when the member clearly was confused about where to get the brochure she was asking about, Rita acted as if she couldn’t be bothered. How can we expect to retain members and attract new ones when the first interaction someone has is with a receptionist who is too bothered to get up and help the person in front of her?” And then, without waiting for an answer to her question, Lacey walked out of Doris’ office.
Later that evening, Doris reflected on Lacey’s observations and behavior. Was Lacey acting on a personal agenda, or was she passing along information in her capacity as a member of the
Board? Could other Board members be pressuring Lacey? Doris wondered why Lacey left so abruptly. Was Lacey’s frustration about Doris’ managerial style? Was the Board using the customer service issue as subtle performance evaluation? Doris resolved that she would need to take action.

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HISTORY

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The Jewish Community Center (JCC), a nonprofit social service organization with a mission to enhance life in both the Jewish and general community, was chartered in 1911 to provide social, recreational, and educational programs to a northeast community.
The one hundred seventy five staff provided services to approximately 3,000 members. The members ranged in age from 1 month to 90 plus years. For almost 100 years, the agency served four generations of families with programs targeted to the full range of needs and interests of
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children, teens, adults of all ages, and especially families. The JCC had an outstanding reputation in childcare and family programs, and had no competition for many, many years of its long history.

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Many changes were bearing down on the JCC. A plethora of new competitors entered the market and each of the competitors served specific segments of the JCC’s membership base.
New day camps sprouted along with a variety of after-school programs, among them boutique gyms for tots, day care centers, and art programs. Specialized fitness centers such as Curves and
Gold’s Gym were eroding market share and the YMCA was planning a new facility scheduled to open in two years. Even Senior Centers in surrounding towns had become especially active with the influx of new state and local funding.
The most significant change in the external environment was in the demographics of the traditional member base. For the previous eighty years, generations of families joined and remained members of the JCC because it was the “right thing to do”. New and potentially new members were more literate, consumer savvy and used to having organizations meet their high expectations. The composition of the membership was also changing with more individual memberships as compared with family memberships. Historically, family memberships were the primary means for funding the full array of programs the JCC offered, and these family memberships were the principal method to fund niche, mission driven programs many of which were used by fewer than 1 percent of the members. In line with growing consumer savvy, families with children were opting for single service providers that met their needs or paying an individual membership for the family member who used a convenient JCC program. These families no longer felt an obligation to join the JCC and pay for an annual family membership.
The proportion of non-Jewish to Jewish members was also growing due to the JCC’s convenient location and reputation of some of its programs. The percentage of Jewish members was eroding from nearly 100 percent three decades ago to its current level of approximately 40 percent. The
JCC faced a constant struggle to maintain membership levels and membership revenues.
Narrow, focused service providers with clear brands were bypassing the all-encompassing community service brand of the past eighty years. The era of unquestioned support for the
Jewish Center by the Jewish community was coming to an end. The Center needed to earn its place in the community as a competitor with other service providers.

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THE JCC ORGANIZATION

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The Board of Directors
The JCC’s members elected representatives who comprised the Board of Directors. The Board
President normally served a two year term and was almost automatically elected to become a life member of the Board. The President and eight other representatives from the full Board comprised an Executive Committee. The Executive Committee met with the Executive Director on a monthly basis. The Board had numerous subcommittees with oversight responsibilities for various operational areas. The Board subcommittees met directly with the managers and department heads of the respective areas. The subcommittees, while trying to be helpful, frequently involved themselves in managing and sometimes performing day-to-day operations as
“volunteers”. The subcommittees reported to the full Board. The full Board met on a monthly basis. The lifetime appointment practice and other policies led to a Board of Directors with more

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than sixty members. While fewer than thirty of the Board members were active participants in the subcommittees and full Board meetings, all Board members freely interjected themselves into the JCC’s operations as they saw fit to do so.

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Due to its long history, a distinct and discernable “JCC Culture” was embedded in the way the
Board interfaced with the professional staff. For more than eighty years, the Board focused on fulfilling the JCC’s mission of serving the community without regard to changes in the societal, social and business environments. Many members of the Board believed that the JCC’s business model and business practices did not need to change. This deeply embedded culture made competing in constantly changing societal, technological and competitive environments even more difficult.
Board members routinely intervened in day-to-day operations and their directions to the staff frequently countermanded previous direction JCC managers and supervisors gave to the staff.
The Board member interventions undermined the professional staff. Although many Board members were the customers of fee-for-service programs such as child day care, they saw no conflict of interest in setting the fees for services for which they were the primary users. To circumvent the fee setting practices, JCC’s program managers forecasted increases in sales to equal expenses in order to balance the operational budget. These were among numerous practices, in place for more than a decade, which led the JCC to experience annual deficits in excess of $100,000 per year. Some Board members stated that nonprofits were expected to lose money. The Board frequently imposed unbudgeted mandates that management was left to reconcile. One example entailed the mandate to pay for a full time police detail at the entrance to the JCC immediately after the beginning of the Iraqi Freedom campaign. The $80,000 cost of detail represented a four percent unbudgeted line item. The JCC’s near term debt was increasing with each passing year. Servicing the line of credit due to the deficits and cost cutting measures to pay for the Board mandates significantly constrained management’s ability to maintain the facility, add new programs, replace equipment, implement operational improvements and provide market rate salaries.

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Individually and collectively, Board members said they wanted to see better results, such as an agency full of members and a staff happily greeting members. The Board did not require management to measure or report organizational performance. Management had little incentive, time or resources to develop and implement a performance measurement system. When Doris and the recently hired comptroller attempted to have the Board help with solving the preceding issues, the Board neither took tangible actions to identify causes or implement solutions nor held themselves accountable. Instead, the Board reverted to intervening in specific issues of interest to them as individuals, all the while thinking they were doing their part as Board members.
According to Doris and other members of the management team, this “JCC culture” was a real obstacle to discussion about change.

The Management Team
At the time of Lacey’s latest observation, Doris had been the Executive Director for approximately two years. Prior to assuming the role of Executive Director, she was the Program

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Director for the JCC. Doris personally selected the five members of the management team, all of whom were passionate about the JCC’s mission. (Figure 1 provides the organizational structure.)
The comptroller, the marketing and membership director, two program directors (children’s services and wellness programs), development director and Doris comprised the JCC’s management team. Most were supervisors of other staff, and Doris considered this group to be her eyes, ears, and sometimes the brain of the agency. Doris trusted their intentions and professional capabilities, did not always agree with them, and tried very hard to develop a team approach, building consensus along the way. They met on a weekly basis to address operational issues, and on a time available basis, to address longer term issues. Current events and responses to the Board’s most recent intervention, and administrative staff issues frequently constituted the meeting agenda.
The management team was credentialed in their professional areas of expertise (e.g. early childhood education). Doris selected each member of the team for his or her respective professional area competency and passion for the JCC’s mission. Only the comptroller had prior management experience as the Executive Director of a medium sized nonprofit. The comptroller’s responsibilities included accounting, the front desk staff, maintenance, security, information technology and human resource management. The comptroller had no full or parttime staff to fulfill the security, information technology and human resource management responsibilities and there were no plans to assign and fill positions to address these responsibilities. Based on subcommittee and daily interactions with the Board and individual
Board members, the management team was frustrated. An external, independent culture survey of the staff indicated they were demoralized and passively hostile to management and the Board.
Insert Figure 1 - Organizational Chart here

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The Front Desk Staff
The front desk staff was in the front line of dealing with customers. Upon entering the JCC or when leaving, the members passed the customer service window. Three women comprised the front desk staff. Their customer service responsibilities included answering all member questions about programs, renewing and adding new memberships. The women “covered” the window as their ancillary responsibilities allowed. The women were expected to perform other administrative duties such as answering the phone and redirecting calls, data entry, preparing member mailings, and assisting the Marketing Director when not responding to member’s inquiries. The front desk staff randomly received changes to programs and policies from all supervisors and directors in the JCC. The method of communication from program managers and supervisors to the front desk staff was equally broad and ranged from formal memos, yellow
“stickies” to telephone calls. Customer service “situations” frequently arose because the front desk’s information was often not consistent with information in printed literature or information the program staff conveyed to members or because communications broke down between the three women.
The front desk staff reported to an office manager and the office manager reported to the comptroller. The office manager was also responsible for the accounting function. In addition to the traditional comptroller’s responsibilities, the comptroller also was responsible for human resource management, information technology, maintenance, security, and all other non-program functions except for marketing and membership. The office manager and comptroller inherited the staff from their predecessors. Two of the front desk staff were recent immigrants and had

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limited command of English. The selection of the current front desk personnel was based on an available body to fill a need at the salary the JCC budgeted.
HUMAN RESOURCE POLICIES

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The JCC had a personnel code that vaguely outlined personnel practices. The JCC did not have specific Human Resource (HR) policies that addressed personnel selection, interviewing, job descriptions, performance evaluation, compensation, termination, training, or succession planning. Monitoring and cultivating a mission driven culture was not considered an integral part of human resource management. The budget deficits impacted the comptroller’s ability to hire a consultant to develop the policies, or hire or reassign a paid staff member to address HR improvements. The budget situation also impacted hiring salaries and salary increases were not always an annual event. Open positions went unfilled, and when filled, candidates frequently met only the minimum requirements for the position.

Finding qualified staff to fill almost 100 hours in the fitness and health centers for below marketrate salaries was a constant struggle, and sometimes customer service skills were overlooked.
Managers hired and promoted staff to fill positions, even though the staff member or applicant may not have had the qualifications or training. Supervision was practiced by department heads who did not often have the necessary training to be supervisors. The management team found it difficult to hold supervisors and staff accountable when they were not trained, were given conflicting direction by Board members, were not always fully staffed, and were working with minimal resources.
CUSTOMER SERVICE

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It was not the first time the subject of poor customer service had come up between Doris and
Lacey, and it seemed to Doris that Lacey really had it in for the front desk staff. In the name of only trying to help (“we cannot make things better if no one knows about them”), Lacey tended to march into the corner office without paying attention to whether she was interrupting anyone or anything. Lacey’s observations were usually accurate, and the issue of customer service was real. She never hesitated to report on unpleasant interactions between staff and members.
Although Lacey knew Doris was working on important issues facing the JCC, Lacey always made sure Doris heard about the latest customer service “misfire.”

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Doris usually responded by walking around the front office, busying herself with small tasks in order to observe the behavior of the staff. Whenever she was in the room, the staff had the best attitude, a pleasant demeanor, and often joked with her. It was not that Doris didn’t exactly believe Lacey. Doris was sure incidents of poor customer service really happened. But it was strange that Doris never saw or heard them herself. In addition to Lacey, there were isolated complaints from the regular complainers: members, some of them in positions of leadership at the agency, who always found something wrong. In contrast with these verbal complaints, a recently completed “member survey” had good or very good checked off for questions such as the quality of the programs, staff competency, quality of the staff – member/user interactions, and quality and availability of program information. The “member survey” results indicated that the overwhelming majority of the JCC’s members were satisfied.

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Doris was acutely aware that “catching” staff in their moments of poor performance was not a useful management technique. The staff in place, no matter their lackluster qualifications, needed a supervisor who could observe them on a consistent basis and help them with their performance issues, rather than catch them. A recent round of budget cuts had reduced the workforce, leaving the office staff supervised by a talented, but overloaded office manager. Not only did the office manager not have enough time for this additional responsibility, but her office was located in a nearby but physically separate area of the building. The office manager was not even within earshot of the front desk’s activities. Although the office staff reported to the controller through the office manager, the front office staff used him as a good person to whom they could complain.
The front desk staff was the group most often criticized for less than stellar customer service.
However, other staff groups were not exempt from member complaints. Although customer service was not a new concept to the agency, its relevance to the organization’s future health and viability was overlooked in many of the hiring and training practices. Members of the management team had initiated several attempts to provide customer service training to the staff.
One attempt entailed a well known book and movie of the Seattle Fish Market’s (renowned for excellent customer service) interactions with customers and discussions with the Fish Market’s managers. A member of the management team led the discussions on customer service after the movie, but it met staff resistance because the staff did not think the manager, himself, had good customer service skills. The “do what I say” did not make sense when the staff saw him in real life encounters. A Board member led a second customer service training session. This training, like similar efforts, met staff resistance due to the universal lack of respect for the Board member. Management’s expectations about the importance of customer service and the need for employees to change were not taking root. Doris was frustrated because she and her
Management Team still did not get it right. She was also irritated that the Board could not (or would not) see its own failures. It was much easier to criticize than to actually fix the problem, and the Board was not the best role model for customer-staff interactions.

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In isolation, each customer service event was not significant. Doris wondered how many members simply didn’t renew their membership instead of complaining. With Lacey’s latest observation, Doris realized that members’ customer service comments were an issue she needed to bring it to the management team. At the next weekly Management Team meeting, Doris asked what she thought was a simple question. “Has anyone noticed how Rita interacts with members? I am constantly getting complaints about her from one of our Board members, but whenever I am within earshot, she seems pleasant.” Dead silence. And then a torrent of comments came from the agency’s management team.
“So who has it out for us now?” asked Molly, the Marketing Director and newest member of
Doris’ management team. It was obvious Molly was tired of hearing about what the staff was doing wrong. “Isn’t there anything we do right?” Doris was about to address the comment when
Connie, a Program Director said, “I was upset, myself. Just last week, I asked Rita to look up the time of a class for me, and I was struck by how unfriendly she was. I chalked it up to her being really busy, but it has been bothering me ever since. If this is the way she talks to me, how does she sound to the public…who always need what they want in a big hurry.”

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“I think we have a real problem” came the booming voice of the controller Charlie, the lone male staff member on the Management Team. He was not someone who suffered fools or who initiated discussions about employee performance. Intelligent and highly trusted, he was often the first person Doris sought out when she wanted to discuss significant agency issues. His observations were always thoughtful. “We have moved staff into positions just to fill the chairs, and it is beginning to show. It’s not only the front office staff, although they are the front line and the face of the agency. Customer service is something we all need to do. It isn’t only for the front desk staff. We cannot afford to have second best for our members who are really used to going first class.”
“You have got to be kidding” interrupted Molly. “The front desk staff takes a good deal of abuse. Our members may expect first class service, but they sure aren’t classy…!” I am not sure they would be satisfied with world class service.” At that, everyone chuckled and the conversation moved on to a new initiative about membership.
ORGANIZATIONAL CHALLENGES

The agency was struggling with many challenges: an aging building, a declining membership, a fiercely competitive environment for funding and resources, a deficit budget, a conflicted Board of Directors, a frustrated management team and a demoralized staff. Doris spent a good part of every day trying to decide where to put her energies, knowing full well that no matter what she chose, someone would have a different opinion. “And the worst part of it”, she told herself, “is that they (the Board) don’t even realize it.” She often felt she had many different bosses who didn’t agree with each other and who surely couldn’t see the whole picture. With resources shrinking, and competition growing, the agency needed to find a way out of its rut.
ORGANIZATIONAL STRENGTHS

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Perhaps the best part of Doris’ day was the simple reward of believing that the work she did actually mattered. Sometimes it would be a staff person who would remind her with a cheerful
“hello” or a “thank you” for help with a problem, or a small child giggling in the hallway on his way to a class, or the sense of belonging she knew the agency created with some of its programs. She often wondered why the Lacey’s of the agency never seemed to see what she saw: a diverse staff working together to provide some of the best programs and services in the community. That the equipment in the fitness center was no longer new and shiny and the roof had seen better days (the bucket standing in the hall to catch the drips on those northeasters was not decorative to be sure) were challenges in this competitive climate, but without the resources to renew and refurbish them, Doris was stuck.

It was sometimes difficult to put aside the constant criticism to find the wisdom in those verbal encounters. But as Doris had learned, every criticism is a gift…something Charlie reminded her of with a smile. “Well,” she said to herself, “I need to build on the strengths that I see in the staff. Even though we are a non-profit, we have a few things to learn from our for-profit counterparts. Customer service applies to every business, and there is no reason the
Center…with our mission…should be different.”

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With that as her immediate goal, Doris decided that her vision of a friendly, efficient, and professional agency started with the front line staff. Without the necessary resources to develop and compensate staff, Doris was left to her own “home grown” devices.

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Figure 1 JCC Organizational Chart

Board Subcommittees

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JCC Board of Directors
(monthly meetings)

Executive Committee
(President and eight members from the full board)

Executive Director

Children’s Programs

Wellness Programs

Development

Comptroller

Office Manager

Marketing and membership

Maintenance

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Human Resource Management*

Front Desk Staff

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Accounting Staff

Information Technology*
Security*
(* unstaffed responsibilities)

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The Frozen Production Line
Anton Massman
U.S. Air Force
Elaine Davis
St. Cloud State University

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Janell M. Kurtz
St. Cloud State University

The assembly line at Electrolux’ Frigidaire plant in St. Cloud, Minnesota hummed with activity.
It was late summer of 2002, and the days were becoming noticeably shorter when just after sunset, a group of newly hired employees in the manufacturing area walked off the line, bringing production to a stop. 1 The manager, already under pressure to improve productivity with this line, was confused. What were these workers doing? Were they quitting? Was it a strike?
Before there was even time to react, however, the workers were back. They had left to observe sunset prayers, one of the five daily prayers central to the Islamic faith. Although the production line was again in operation, Electrolux management could not ignore the incident.
ELECTROLUX BACKGROUND

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Electrolux, a Stockholm based company, was the parent of Frigidaire, an upright and chest freezer manufacturer. According to the corporate website, “there is a reason why people call it a fridge;” eighty-five years ago, Frigidaire invented the first self-contained refrigerator. 2 In 1986
Electrolux purchased Frigidaire and what was known as Franklin Manufacturing in St. Cloud.
The factory was a mainstay in St. Cloud since 1945 when it first started production, and by 2002, more than 75% of all freezers sold in North America were manufactured at the facility. 3 There were approximately 1500 unionized employees at the plant. 4 Since it was a unionized manufacturing business, Frigidaire was not immune to periodical layoffs and strikes. Further, strong global competition caused productivity to be an issue. The relocation of production to countries with lower cost levels was an ongoing concern at the Electrolux facility in St. Cloud. 5
Electrolux was in the process of restructuring to improve cost structure and productivity, and although the St. Cloud plant was not specifically targeted, plant closures and relocations were under consideration. 6

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Electrolux’ mission was to be the “world leader in profitably marketing innovative product and service solutions to real problems, thereby making the personal and professional lives of our customers easier and more enjoyable.” 7 In achieving the mission, Electrolux made a commitment to the “Electrolux way of doing things.” 8 Specifically, the principles by which
Electrolux conducted its relations with employees, shareholders, business partners and others were formalized in a Code of Ethics (See Figure 1). 9 Work standards were set forth in the
Workplace Code of Conduct (See Figure 2). 10

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Figure 1: Selected Sections of The Electrolux Group Code of Ethics
Introduction
The Electrolux Group is committed to conducting its business and pursuing its interests in a legal and ethical manner. The Group’s policy is to be a responsible corporate citizen. Illegal behavior or actions by Electrolux or any person associated with the Group threaten to undermine the Group’s reputation for honesty and integrity, and will not be tolerated. Electrolux believes its excellent reputation contributes to business success.

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It is the responsibility of employees and management alike to ensure compliance with this Code of
Ethics. Employees are encouraged and expected to report any incidents of non-compliance to relevant internal officers, with the assurance that there will be no retaliation or other negative consequences for persons reporting in good faith.

Workplace Practices
All Electrolux Group activities must be conducted with respect for human rights, employee health and safety, and the well-being of local communities in which the Group operates. No Group operating unit or employee shall tolerate underage or bonded labor; cultural, ethnic or gender discrimination; or physical, psychological, sexual or verbal abuse. Wages shall equal or exceed levels specified by applicable local law, and all employees are free to exercise the right to form, join or refrain from joining labor unions or other organizations devoted to collective bargaining.

Figure 2: Selected Sections of The Electrolux Group Workplace Code of Conduct
Introduction

The Electrolux Group is dedicated to being a responsible employer and a good corporate citizen, with products and solutions that contribute to improving people’s lives around the world. All our activities – including the manufacture, distribution and sale of our products – must be conducted with respect and consideration for human rights, for human safety and health and for the environment. We strive for continuous improvement with sustainability as a core concern in all our operations.

Non-discrimination

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Electrolux Group recognizes and respects cultural differences. Nevertheless, all employees shall be treated strictly according to his or her abilities and qualifications in any employment decisions, including but not limited to hiring, advancement, compensation, benefits, training, layoffs and termination.

HOW SOMALIS CAME TO WORK FOR ELECTROLUX

Somalia was one of the most dangerous places on earth. 11 With the overthrow of President Siad
Barre in 1991, the country plunged into civil war and lawlessness. Years of fighting between rival clans and the country’s inability to deal with famine and disease led many Somalis to seek refuge in the United States. Since the mid-1990s large numbers of Somali refugees had come to the United States, and Minnesota was a favored destination. 12 More than 25,000 Somalis had relocated to Minnesota.

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Initially, Minnesota was an attractive destination because of its strong social support programs and an economy that offered job opportunities. For example, Lutheran Social Services and
Catholic Charities of Minnesota, large nonprofit social service agencies, had as part of their respective missions helping refugees settle and become self- sufficient. 13 The State of
Minnesota also offered comprehensive employment and training services through its WorkForce
Centers, a one-stop source for both job-seekers and business offering a wide range of information, services, and tools at no cost. 14 Further, labor shortages in the mid-1990s created considerable demand, especially for unskilled workers. Thus, the influx of Somali workers at a time when businesses, such as the Electrolux plant in St. Cloud Minnesota, were facing labor shortages appeared to present a win-win situation. Approximately 3000 Somalis lived in St.
Cloud, and it was estimated that more than 150 Somalis were employed at Electrolux.
THE SOMALI IMMIGRANTS

The Somali immigrants who relocated to St. Cloud differed from other recent immigrants in a number of significant ways, including literacy, appearance and ancestral loyalties. Unlike other recent immigrants, many of the Somalis were illiterate. Thus, in addition to having no English language skills, these immigrants could not read Somali. This created a new problem for employers, as written translations did not suffice. As a result, translators, not just translations, were required for even the smallest and most mundane tasks.
Overall appearance and dress made these new immigrants stand out far more than the previous
Hispanic and Asian immigrants. As Muslims, the Somalis followed the Islamic faith, and in adherence to Islamic standards of modesty, women covered nearly their entire body with head scarves and long loose traditional dress. In addition to the dress, Somalis were dark skinned causing them to be more noticeable in a community that was 98% Christian and Caucasian.

LL

Another distinction was prayer. One of the five pillars of Islam was ritual prayer. There were five compulsory daily prayers. Requirements of prayer included performing of ablution, or cleansing wash, and praying at set times during the day. The obligatory times for two of the prayers were sunrise and sunset. For example, the fourth prayer, the Maghrib, was to be offered within 90 minutes of sunset. In Minnesota, the times of sunrise and sunset change drastically throughout the seasons of the year.
SOMALIS AT ELECTROLUX

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The subject of prayer was an ongoing problem for the plant since the first Somali hires, especially the obligatory sunrise and sunset prayers which had to be observed within an exacting time period. The plant was a unionized manufacturing facility that maintained a strict schedule for start times of shifts and breaks. Other issues related to prayer were that there was no place for the required cleansing wash and no clean, quiet place to kneel down to pray. Prior to the current incident, it was believed that Somalis were privately organizing an attempt to persuade
Electrolux to allow time for prayer and a suitable prayer location.
Due to the circumstances, Somali employees were left to improvise. Speculation was that the employee bathrooms were being used for prayer time because of the necessity to wash prior to

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prayer. Rumor also was that in order to hide the fact that they were praying during unscheduled breaks in the restroom, Somalis were using the toilet bowl water and hiding in stalls for prayer.
Other employees, it was conjectured, were beginning to complain about the excess water spilled throughout the bathroom claiming health and safety concerns regarding the state of the restrooms. D
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Supervisors were allowed to give workers unscheduled restrooms breaks. When this occurred, the supervisor replaced the worker at his station for about 10 minutes to keep the line flowing. It was generally an unwritten agreement between the union and management that the supervisors would be given about 30 to 45 minutes per shift to relieve employees. These break times were starting to increase significantly and the supervisors were subbing nearly 60 to 75 minutes a shift and thus not completing their regular assigned tasks.
Management needed to bring the situation under control. There were two matters to address.
First, how should Electrolux deal with the employees who walked off the line? Second, what was the appropriate response to the workers’ requirement for prayer?
1

13

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Freezer Maker Settles Complaint Filed on Behalf of Muslim Workers, ASSOCIATED PRESS STATE & LOCAL WIRE,
Sept. 5, 2003. Similarly, thirty Muslims walked off the job at a Dell Inc. plant. Gary Tanner, Somali Workers Walk
Off Job at Tennessee plant in Prayer Dispute, ASSOCIATED PRESS STATE & LOCAL WIRE, Mar. 12, 2005.
2
HISTORY OF FRIGIDAIRE. at http://www.frigidaire-intl.com/history.asp (2007).
3
Sue Halena, Frigidaire Fraught with Friction: Company’s Post-Strike Policies Frustrate Freezer Factory
Workers, ST. CLOUD TIMES, Feb. 3, 2001, at B1.
4
City of St. Cloud Comprehensive Annual Financial Report For the Year Ended December 31, 2006, available at http://www.ci.stcloud.mn.us/Web/departments/Finance/budget/2006/Apx%20for%20web.pdf. 5
In 2005, Electrolux launched a restructuring program to lower production costs. Manufacturing facilities in
France, Spain, Italy, Sweden, and Germany were closing, with new plants opening in Thailand, Mexico and Poland.
Electrolux Annual Report 2005, at www.electrolux.com/annualreport2005.
6
ELECTROLUX CORPORATE INFORMATION, CALENDAR, CONFERENCE CALL REGARDING RESTRUCTURING
ANNOUNCEMENT ON DECEMBER 14, 2001, at http://www.electrolux.com/node63.aspx?eventid=91 (last visited
September 16, 2007).
7
THE ELECTROLUX MISSION, at http://www.electrolux.com/node190.aspx (last visited Mar. 9, 2007).
8
Id.
9
ELECTROLUX, CODE OF ETHICS, at http://www.electrolux.com/node320.aspx (last visited Mar. 9, 2007).
10
ELECTROLUX, WORKPLACE CODE OF CONDUCT, at http://www.electrolux.com/node183.aspx (last visited Mar. 9,
2007).
11
Peter Biles, Somalia's endless struggle for peace, BBC NEWS, at http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/6234007.stm (Jan. 6, 2007).
12
Patrick Condon, Minnesota leads nation in Somali immigrants, ASSOCIATED PRESS, Feb. 17, 2006.
See, LUTHERAN SOCIAL SERVICES, REFUGEE AND EMPLOYMENT SERVICE at http://www.lssmn.org/refugee.htm
(last visited Mar. 8, 2007); CATHOLIC CHARITIES, PROGRAMS AND SERVICES at http://www.catholiccharitiesinfo.org/faqs/services.htm (last visited Mar. 8, 2007).
14
MINNESOTA WORKFORCE CENTER SYSTEM, PARTNERS AND SERVICES at http://www.mnwfc.org/partners.htm (last visited Mar. 8, 2007).

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Dow Chemical and Agent Orange in
Vietnam i
Cedric Dawkins, Ph.D.
Associate Professor of Management
California State Polytechnic University - Pomona

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"War damages people, lives and the environment. Any future issues involving Agent Orange should be the responsibility of the respective governments as a matter of political and social policy." Scot Wheeler, spokesman for Dow Chemical. 1
"I’ll fight, not just for myself, but for millions of Vietnamese victims. Those who produced these toxic chemicals must take responsibility for their action."
Nguyen Van Quy, plaintiff with cancer and whose two children were disabled. 2

There were a number of challenges facing new Dow Chemical Company CEO Andrew Liveris when he assumed leadership of the company in November of 2004. Dow was a leader in chemical, plastic and agricultural products with business operations in 175 countries. Its products included performance plastics, performance chemicals, agricultural products, and plastics, and it had annual sales of $40 billion in 2004. Besides assuring Dow’s stability after a turbulent period in which the chemical giant struggled to survive, Liveris was confronted with a number of social issues including the lingering controversy over silicon breast implants, and the legacy of Union Carbide’s ii chemical disaster in Bhopal, India. Still, when he sat down for an interview with SmartMoney in May of 2005 he found himself addressing the company’s production of Agent Orange, a defoliant used by the U.S. military during the Vietnam War. Of the Agent Orange issue, he replied:

Those issues are well behind us. But the perception is that the chemical industry does bad things… Agent
Orange [is an] episode that [has] got nothing to do with chemistry enabling human beings and everything to do with governments going to war. And you know, when governments go to war, all rules are out the door 3 .

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The issue of responsibility for products used during the war was not, however, so clear-cut.
Thirty-five years after U.S. armed forces stopped spraying Agent Orange in Vietnam, iii
Vietnamese civilians who were exposed to the defoliant had their day in court. The Vietnamese litigants alleged that the company had manufactured a poison that contaminated those who came in contact with it, their offspring, and the environment. The civil suit sought unspecified damages claiming that Agent Orange caused birth defects, cancer and other health problems and that supplying the substance, amounted to a war crime. When Judge Jack B. Weinstein issued his ruling in 2005 there were a number of interested parties: Vietnamese litigants and citizens, chemical industry officials, and stakeholder groups for the litigants. Other concerned stakeholders included Le Collectif Vietnam Dioxin, the Comptroller of the City of New York i Professor Dawkins prepared this case from published sources as the basis for class discussion rather than to illustrate either effective or ineffective handing of an administrative situation.

ii iii Dow Chemical purchased Union Carbide in 1999.
A map of Vietnam is provided in Exhibit 1.

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representing concerned stockholders, and – somewhat surprisingly – U.S. Vietnam veterans groups who alleged similar problems from Agent Orange exposure.
----------------------------------------Insert Exhibit 1 about here
-----------------------------------------

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Agent Orange and the War Effort
During the Vietnam War, Dow and other chemical companies contracted with the U.S. Defense
Department to provide various products including herbicides. Although a number of other chemical manufacturers produced Agent Orange and were named in the suit, Dow as the primary developer and manufacturer was prominently identified with the issue. From 1962 to 1971, U.S. military forces sprayed more than 19 million gallons of herbicides, including 12 million gallons of Agent Orange, over Vietnam, Cambodia and Laos. 4 The purpose was to strip the thick jungle canopy that helped conceal opposition forces, destroy crops that might sustain them, and clear tall grass and bushes from the perimeters of U.S. base camps. U.S. Air Force operations dispersed more than 95% of all herbicides used during the war, but herbicides were also sprayed from boats and ground vehicles, and by soldiers wearing back-mounted equipment.
Agent Orange – thus named because of the color of the band on its containers – was a 50:50 mixture of the chemicals 2,4-D and 2,4,5-T the latter of which contained the contaminant
DIOXIN (tetrachlorodibenzo-p-dioxin or TCDD), which has been described as “one of the most toxic chemicals known to man.” 5 Dioxin was not a commercial product produced deliberately by Dow, but rather a trace contaminant created during the production of Agent Orange. It was said to provoke cancers and malformations, as well as harm the immune, nervous and reproductive systems. International health guidelines stated that daily human exposure to dioxin should not exceed picograms – a picogram being a millionth of a millionth of a gram. 6

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The estimated area sprayed with Agent Orange was 1,679,734 hectares, 7 an area larger than
Delaware and Rhode Island combined. According to the latest estimates, between 2.1 and 4.8 million Vietnamese people were directly exposed to herbicides between 1961 to1971. In addition, an unknown number of Cambodians, Laotians, and soldiers were likewise exposed.
Because dioxin could be transmitted via the food chain through breast milk, cow’s milk, and the consumption of contaminated meat and fish, the total number of those exposed was difficult to determine. 8

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Prelude to a Problem
During the latter half of the 1960’s evidence began to mount linking dioxin to various medical problems. In fact, military usage of herbicides in Vietnam was a matter of scientific controversy from its inception. As early as 1968, scientists and health officials expressed concerns about the potential dangers of Agent Orange and dioxin to humans. iv For instance, in February 1969 the
Bionetics Research Council (BRC), commissioned by the United States Department of
Agriculture, reported that dioxin demonstrated a "significant potential to increase birth defects.” 9
Within four months of the BRC report, Vietnamese newspapers began reporting significant increases in human birth defects in areas sprayed with Agent Orange. 10 iv See Exhibit 2 for a time table of important dates

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In the fall of 1969, the National Institutes of Health confirmed that dioxin could cause malformations and stillbirths in mice, prompting the Department of Defense to announce a partial curtailment of Agent Orange use in Vietnam. 11 Public officials in the U.S. were disturbed by studies linking dioxin to birth defects. Subsequently, the Surgeon General issued a warning about the dangers of dioxin in April 1970 and it was banned from domestic use later that year. 12

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What Dow officials knew about the dangers associated with its product and when they knew it, was a matter of dispute. Dow spokespersons maintained that the only concern the company had with respect to Agent Orange was a skin condition called chloracne. Others, U.S. Vietnam veterans for example, alleged that Dow and their industry peers were aware of problems early on, but attempted to address the issue outside of the public eye. 13 In 1964 Dr. Benjamin Holder, medical director at Dow, noted that exposure to dioxin could severely damage organs and cause other systemic problems. 14 During that same time period, Dow executives voiced concern about an “alarming amount” of toxins in Agent Orange and the possibilities of a Congressional investigation and restrictive legislation if the problem was not addressed. 15
Moreover, there was this statement from military scientist Dr. James Clary in a 1979 letter to
Congress:

When we initiated the herbicide program in the 1960’s we were aware of the potential damage due to dioxin contamination in the herbicide, however because the material was to be used on the enemy, none of us were overly concerned.” 16

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The Vietnam Veterans of America
As official attention to the negative effects of dioxin and Agent Orange escalated, the U.S. veterans of the Vietnam War returned home and by the end of 1983, over 9,000 veterans had filed claims for disabilities they alleged were caused by exposure to Agent Orange. 17 In 1984 lawyers representing the U.S. veterans exposed to Agent Orange during the war settled a classaction law alleging that the U.S. chemical companies concealed the dangers of Agent Orange, particularly dioxin, from the U.S. military. Despite what they saw as weak claims by U.S.
Vietnam veterans – the Eastern District Court later explained that the veterans were facing nearcertain defeat – chemical companies paid $183 million to settle the lawsuit, avoid years of potential litigation, and definitively resolve the issue. v Chemical industry leaders felt that the settlement was generous given an uncertain relationship between their product and medical problems, but it did little to quell discontent among the litigants and their supporters about the alleged medical problems.
Science and Controversy
In view of this discontent, the 1984 Dioxin Act mandated scientific studies of the health effects experienced by veterans who had been exposed to Agent Orange. Scientists acknowledged toxicity of dioxin to animals but opinion varied about whether it was harmful to humans, especially at the trace levels present in herbicides. Due to the politically charged nature of the issue, studies of Agent Orange were completed by a number of organizations but there was no consensus. The most impartial and authoritative studies were completed by the Institute of v The equivalent in May 2007 dollars is approximately 700 million, given an interest rate of 6 percent.

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Health at the National Academy of Sciences (NAS). The NAS concluded that Agent Orange was related to, or as likely as not to have caused a number of disorders such as spina bifida, various cancers, Hodgkins disease, soft tissue sarcomas, and multiple myeloma and that there was no safe threshold for exposure to dioxin. 18

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Establishing cause, however, required more than identifying a correlation between two factors.
The chemical industry maintained that the scientific evidence was not strong enough to prove that exposure to Agent Orange caused the diseases in question. They were not alone in that position; The Washington Post noted the inherent uncertainty in trying to measure the dangers posed by the chemicals. Because human experimentation was prohibited, it was exceedingly difficult to assess the effect of varied doses of chemicals on human health. In the end scientists could only speculate about the health effects of Agent Orange. 19

Having devoted several decades to studying the effects of Agent Orange Arnold Schecter, a renowned public health physician at the University of Texas, said there were still real doubts about the cause of the birth defects experienced by Vietnamese citizens. He added, however, that in certain areas of Vietnam dioxin levels were still very high, saying "what is not in dispute at all is that there are elevated levels of dioxin in many Vietnamese.” 20
The Vietnamese Civilian Lawsuit
Although the chemical manufacturers settled the U.S. Vietnam veterans’ case in 1984, they did not acknowledge any link between their product and the alleged illnesses. Vietnamese citizens and their advocates criticized the position as morally untenable. Professor Ngo Thanh Nhan, member of the Vietnam Agent Orange Relief and Reconciliation Campaign stated:
“There is no reason why those who sprayed chemicals can get compensation for their contamination while the victims’ suit is rejected…” 21

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In 1995 the Clinton Administration lifted the U.S. embargo on Vietnam and normalized diplomatic relations. Subsequently, on January 30, 2004 the first-ever legal attempt by
Vietnamese citizens to seek compensation for the effects of Agent Orange was filed by Ms. Phan
Thi Phi Phi, Mr. Nguyen Van Quy, and Ms. Duong Quynh Hoa in Brooklyn Federal Court.
They were joined by the Vietnamese Association of Victims of Agent Orange (VAVA) representing millions of alleged Vietnamese Agent Orange victims, in accusing U.S. chemical companies of war crimes for producing and supplying the toxic defoliants used by the U.S. military in Vietnam.
The Vietnamese litigants cited medical evidences linking Agent Orange to genetic changes, cancer and deformities in the affected victims, their children, and grandchildren. According to advocacy group le Collectif Vietnam Dioxine, of over 4 million Agent Orange victims in
Vietnam, about one million were seriously affected and about 200,000 children suffered from paralysis, mental retardation, blindness, deafness and deformities. Some babies were born without eyes or arms, or were missing internal organs. vi

vi

Http://digitaljournalist.org/issue0401/pjg29.html. This photo is part of a gallery of photos from the Vietnam War that contains graphic and potentially disturbing images. Retrieved from The Digital Journalist on February 25, 2008

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The plaintiffs presented numerous scientific evidences on the direct and indirect consequences of civilian exposure to Agent Orange during the Vietnam War. They argued that according to the
U.S. Government contract for defoliants the chemical companies should have supplied materials that were not harmful to human health. Among the U.S. and international laws they cited were: the War Crimes Act, vii the 1949 Geneva Convention on the Protection of Civilian Persons in the
Time of War, viii and the Geneva Protocol ix . 22

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As with the Vietnam War in general, the Agent Orange issue continued to resonate with the U.S. public. Sympathy was fairly pronounced for U.S. veterans and Vietnamese civilians alike. A
Zogby Poll taken in November of 2004 after the lawsuit was filed showed that 51.4% of
Americans believed that the chemical companies should compensate Vietnamese citizens affected by Agent Orange. A higher percentage, 64.4%, indicated that the U.S. Government had a moral responsibility to compensate U.S. servicemen and Vietnamese citizens affected by Agent
Orange. 23
The Chemical Industry Defense
There were a number of factors for Dow to consider with respect to the litigation and the claims of the litigants in general. Besides the potential for ruinous financial liability, if Dow negotiated a settlement and compensated the Vietnamese litigants, then other stakeholder might have expected similar treatment (e.g. dioxin contamination in Midland, Michigan, and the Bhopal disaster in India involving its subsidiary Union Carbide). Given this possibility, the Agent
Orange case was not a singular issue but one that could threaten the viability Dow and other companies in the chemical industry.

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Dow and chemical industry representatives made four primary points in defending their actions: 24
They were compelled by the U.S. Government to produce Agent Orange under the
Defense Production Act, and the product was manufactured according to military specifications. Because the U.S. Government was aware of the herbicides' dioxin levels, they were protected under the government-contractor defense.
After Agent Orange was manufactured and packaged, the U.S. military took immediate and complete control of the chemical. The U.S. military had sole responsibility for the transportation of Agent Orange to Vietnam, and for how it was stored and used in Vietnam.
There was no conclusive evidence that Agent Orange caused any medical problem except chloracne.
Alleged damage caused by Agent Orange was a matter of social and public policy that should be addressed by the respective governments.

vii

This law was passed in the U.S. in 1996, and made it a crime to violate the Geneva Conventions prohibiting torture and permitted violators to be prosecuted. viii Consists of four treaties (conventions) that were developed in Geneva, Switzerland that set standards for human treatment of prisoners and non-combatants. ix The Geneva Protocol was a treaty prohibiting the use of chemical and biological weapons that was ratified in
1925.

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The U.S. Government could not be sued in the case because of sovereign immunity x , but the
Bush Administration submitted a legal brief arguing that the case should be dismissed because hearing cases brought by former enemies would diminish the President’s ability to wage war.

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The Ruling and its Aftermath
On March 10, 2005, Judge Weinstein of the U.S. Federal Court in Brooklyn, New York, dismissed the lawsuit by the Vietnamese litigants. He found that the companies were not in violation of international conventions on chemical warfare and, in any event, they were shielded from liability because they were contractors following military orders. Moreover, the U.S.
Government had not banned the use of Agent Orange prior to its use in the Vietnam War and had not been a signatory to any international convention relating to its use. He also ruled that the plaintiffs’ documents were not sufficient to establish that Agent Orange caused the medical problems the plaintiffs alleged. Finally, he determined that there was no law to support the plaintiffs’ claim that the firms were guilty of crimes against humanity for making dioxin available. The chemical companies were vindicated on virtually every count.
Undeterred by their resounding defeat, the Vietnamese litigants vowed to appeal the decision. A number of lawyers from U.S. law firms subsequently agreed to represent them and submitted documents in Appellate Court. Regardless of the outcome an appeal to the U.S. Supreme Court seemed likely. Paul Sutton, head of the Veterans of Vietnam Association Agent Orange/Dioxin
Committee, was also critical of the decision:
"[Dow and the Chemical industry] have been using the same line [that more research is needed] all along… They are simply worried it might end up costing them millions and millions of dollars to tackle a problem they should have solved 30 years ago." 25

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The ruling also drew international attention. A conference was held in Paris, France to address the plight of the Vietnamese Agent Orange victims and solicit international support. As the
Vietnamese Association of Victims of Agent Orange pressed moral and legal appeals, scientists described a ravaged country. Vo Quy, a Vietnamese biologist who had studied Agent Orange since 1971, said dioxin was in its third generation affecting the ecosystem: xi "They destroyed our environment and have made a lot of difficulties for the poorest people in our country, for their children, for their grandchildren." 26

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Continuing Struggles
Although Dow prevailed in the U.S., they lost a key decision abroad. On January 26, 2006 a high court in South Korea xii ordered Dow and Monsanto to pay $62 million in compensation to
South Korean veterans of the Vietnam War for medical problems associated with Agent Orange exposure. The court ruled that product design errors by the companies led to higher amounts of dioxin in the defoliants than were necessary and that there was a causal relationship between x Under the doctrine of Sovereign immunity the government cannot commit a legal wrong and is thus immune from civil suits or criminal prosecution. xi See exhibit 4. http://digitaljournalist.org/issue0401/pjg04.html. This photo is part of a gallery of photos from the
Vietnam War that contains graphic and potentially disturbing images. Retrieved from The Digital Journalist on
February 25, 2008: xii U.S. allies in the Vietnam War included New Zealand, Australia, and South Korea.

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Agent Orange and the medical problems of South Korean veterans and their families. Dow and
Monsanto vowed to appeal the decision. 27
In addition, a new and formidable stakeholder group voiced displeasure about the legacy of
Agent Orange – investors. At Dow’s annual meeting in May of 2007 shareholders xiii representing over 6.6 million shares filed three resolutions demanding reports on alleged harms to human health and the environment in Dow’s operations at home and abroad. New York City
Comptroller William C. Thompson, Jr., summed up the spirit of the resolutions:

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"First and foremost, we must consider our fiduciary obligation, and that includes ensuring that the companies we invest in are responsible corporate citizens not only in the communities where they operate today, but wherever their business decisions have impacted human lives…”. 28

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These resolutions raised serious concerns about the company’s ability to manage risks and its reputation as a corporate citizen. While many of the Vietnamese plaintiffs were angry about having the case dismissed, others seemed to recognize the complexity of the issue. "It takes time to develop a conscience," said Pham Ngoc Tien, a public health official in the province of Thai
Binh which had a large number of contamination cases.” 29 To Dow officials, however, the
Agent Orange issue was a matter of public policy rather than a matter of corporate conscience.
Whether the legal and ethical aspects of this issue could be reconciled remained to be seen.
Whatever the outcome, Liveris’ statement that Agent Orange issues "[were] well behind us" may have been little more than wishful thinking. He may well have wondered what Dow could have done differently and what they could learn from this episode that might prevent similar problems in the future.

xiii

The shareholders included the New York City Pension Funds, New York State Common Retirement Fund
(NYSCRF), Trillium Asset Management, Amnesty International USA (AIUSA), Dominican Sisters: Grand Rapids,
Sisters of Holy Cross, and Sisters of Mercy Regional Community of Detroit Charitable Trust.

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Exhibit 1. Vietnam

Downloaded from US. Department of State Bureau of East Asian and Pacific Affairs.

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Exhibit 2. Time Table of Key Events xiv

1950

1960

Arthur W. Galston, a graduate student at the University of Illinois, discovers that chemicals that inhibit plant growth can also increase the number of floral buds and harvestable pods produced on soybean plants getting ready to flower.
Scientific studies on the effects of growth inhibiters continue during World War II, at
Ft. Detrick, Maryland.
1950. President Dwight Eisenhower refuses to sign an order that would allow the use of herbicides in Korea.

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1940

The United States military experiments with herbicides at Fort Drum, New York.
1961 – President John F. Kennedy approves of using herbicides in Vietnam. Tests of herbicides on the Vietnamese countryside begin in August, 1961, and continue through
December, 1961.
1962 – The first shipment of Agent Orange arrives in Vietnam. Systematic testing continues for years.
1965 – Operation Ranch Hand “Only we can prevent forests” begins in Vietnam.

1966 – Professor Arthur W. Galston and 12 colleagues from the American Society of
Plant Physiologists send a letter to President Lyndon B. Johnson expressing their concerns that herbicides might harm human beings in Vietnam, and challenging the use of herbicides to destroy food crops.
1967 – A team of Japanese filmmakers interview Vietnamese who live in areas where
Agent Orange has been used.
1969 – Bert Pfeiffer and other scientists visit Vietnam. Also, reports of frequent birth defects in defoliated areas begin to surface.

LL

A

1970

Bionetics Labatories of Bethesda, Maryland, releases the results of its study, completed in 1965, that even in the lowest dose given, 2,4-5-T causes cleft palates, missing and deformed eyes, cystic kidneys, and enlarged livers in the offspring of laboratory animals. 1970 – Congress directs the Department of Defense to engage the National Academy of
Sciences to conduct a comprehensive study of the ecological and physiological effects of Agent Orange.
1970 – On April 15, Deputy Secretary of Defense David Packard announces the immediate suspension of the use of 2,4,5-T in Vietnam.

xiv

Compiled from Scorched Earth: Legacies of Chemical Warfare In Vietnam by Fred Wilcox.
Used with Permission.

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1970 – Surgeon General reports to Hart committee on restrictions of 2,4,5-T; suspension of liquid formulation for home use; suspension of all aquatic uses; intent to cancel registration of non-liquid formulations for use around homes and on all food crops. 1970 – Thomas Whiteside writes in the June 20, 1970 issue of the New Yorker that the sale and use of 2,4,5-T continues within the United States.

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1978 – Paul Rheutershan announces that he “died in Vietnam and didn’t even know it.”

Beginning the class action lawsuit on behalf of Vietnam veterans and their families. 1979 – Environmental Protection Agency issues emergency suspension of 2,4,5-T and
2,45-TP (Silvex) in the United States. United States.
1980

1983 – Veterans class action lawsuit settled out of court for 180 million dollars.

1990

1984 – Fairness Hearings, whereby a Judge assesses the reasonableness of a settlement, leads to out of court settlement.
1995 – President Clinton normalized diplomatic relations with Vietnam.

2000 xv 2004 – Vietnamese launched class action suit charging chemical manufacturers of
Agent Orange with war crimes.

2005 – Judge Julius Weinstein dismisses class action lawsuit on behalf of Vietnamese charging the wartime manufacturers of Agent Orange with war crimes. Lawyers file for xv LL

Many of the areas of contamination were among the poorest areas in Vietnam and data was not compiled. According to Vietnamese Association of Victims of Agent Orange millions were affected by dioxin poisoning. Precise numbers were difficult to obtain, but anecdotal information was available: Time Magazine reported that in Quang Ngai province, south of Da
Nang, where the spraying of Agent Orange was especially heavy, there were almost 15,000 residents officially classified by the Vietnamese government as dioxin victims (Isaacson, 2007).

A

Out of a population of perhaps 84 million Vietnamese, itself reduced by several million during the war, there were as many as one million cases of Agent Orange affliction still on the books when the author visited Vietnam in 2006 (Hitchens, 2006).
Hitchens, C. (2006). The Vietnam Syndrome. Vanity Fair, August. Downloaded from the
World Wide Web on May 10, 2007: http://www.vanityfair.com/politics/features/2006/08/hitchens200608. Isaacson, W. (2007). The Last Battle of Vietnam. Time, March 2. Downloaded from the World
Wide Web on May 10, 2007: http://www.time.com/time/magazine/article/0,9171,1595236,00.html Page 66

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Vietnamese plaintiffs file appeal.

A

LL

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2007 – Vietnamese citizens appeal scheduled to be heard by U.S. Court of Appeals on
June 18.

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Case References
1

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LL

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Glaberson, W. (2005). Agent Orange Case for Millions of Vietnamese Is Dismissed. New York
Times. March 10.
2
BBC News (2006). Vietnam Fury at Agent Orange case. BBC News. November 3, 2005.
Downloaded from the World Wide Web on February 10, 2006: http://news.bbc.co.uk/go/pr/fr//2/hi/asia-pacific/4339419.stm.
3
Pearlman, R. (2005). CEO Interview: Dow’s New Formula for Success. SmartMoney
Magazine. Downloaded from the World Wide Web on December 30, 2005: http://www.smartmoney.com/mag/ceo/index.cfm?story=may2005. 4
Stellman, J.M., Stellman, S.D., Christian, R., Weber, T., and C. Tomasallo. (2003a). The extent and patterns of usage of Agent Orange and other herbicides in Việt Nam", Nature, Volume 422.
5
Zumwalt, Jr., E.R. (1990) Report to Secretary of the Department of Veterans Affairs on the
Association between Adverse Health Effects and Exposure to Agent Orange. Reported by
Special Assistant Admiral.
6
Ibid 4
7
Stellman, J.M., Stellman, S.D., Christian, R., Weber, T., and C. Tomasallo. (2003b). A
Geographic Information System for characterizing exposure to Agent Orange and other herbicides in Vietnam. Environ. Health Perspect 111, 321–323.
8
Ibid. 5
9
Myers, B. (1979). Soldier of Orange: The Administrative, Diplomatic, Legislative and
Litigatory Impact of Herbicide Agent Orange in South Vietnam," 8 B. C. Env’t. Aff. L. Rev.
159, 162.
10
Phuong, E. (1979a). An Estimate of Reproductive Abnormalities in Women Inhabiting
Herbicide Sprayed and Non-herbicide Sprayed Areas in the South of Vietnam, 152-1981 18
Chemospere 843-846.
Phuong, E. (1979b). An Estimate of the Incidence of birth Defects, Hydatidiform Mole and
Fetal Death in Utero Between 1952 and 1985 at the OB-GYN Hospital of Ho Chi Minh City,
Republic of Vietnam," 18 Chemosphere 805-810.
11
Ibid. 8
12
Courtney, K. D. (1970). Teratogenic evaluation of 2,4,5-T. Science 168, 864–866.
13
Moyers, W. (2006). Trade Secrets: A Moyers Report. Downloaded from the World Wide Web on December 3. 2006: www.pbs.org/tradesecrets/.
14
Casten, L. (1990). Patterns of Secrecy: Dioxin and Agent Orange (1990). Unpublished manuscript detailing the efforts of government and industry to obscure the serious health consequences of exposure to dioxin. Cited in: cited in Admiral E.R. Zumwalt, Jr. (1990)
Report to Secretary of the Department of Veterans Affairs on the Association Between Adverse
Health Effects and Exposure to Agent Orange.
15
Burnham, D. (1983). 1965 Memos Show Dow’s Anxiety on Dioxin. The New York Times.
Republished on April 17, 2007. Downloaded from the World Wide Web on May 15, 2007.
16
Ibid. 4
17
Ibid. 4
18
National Academy of Science. (2006). Health Risks from Dioxin and Related Compounds:
Evaluation of the EPA Reassessment. Downloaded from the World Wide Web on May 19,
2007: http://www.nap.edu/catalog/11688.html.
19
Measuring Chemicals’ Dangers: Too Much Guesswork? (1990). The Washington Post"

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Washington Post, March 23.
20
Newsday.com (2005). U.S., Vietnam still at odds. August 1, 2005. Downloaded from the
World Wide Web on February 23, 2006: http://www.newsday.com/news/nationworld/nation/nyusviet0801,0,7217306.story.
22

A

LL

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Steinglass, M. (2005). Vietnamese seeking redress from US in Agent Orange suit. The Boston
Globe. February 27.
23
Ibid. 19
24
Dow.com. (2005) Downloaded from the World Wide Web on October 24, 2005: http://www.dow.com/about/aboutdow/about.htm. 25
Press Release. Despite court ruling, campaign for Agent Orange justice will continue. http://www.ffrd.org/Lawsuit/FRDAOPress.htm 26
Newsday.com (2005). U.S., Vietnam still at odds. August 1, 2005. Downloaded from the
World Wide Web on February 23, 2006: http://www.newsday.com/news/nationworld/nation/nyusviet0801,0,7217306.story.
27
Chang, J.S. (2006). South Korean court orders two U.S. companies to pay damages over
Agent Orange. Associated Press Financial Wire. Downloaded from the World Wide Web on
February 24, 2006: http://www.lasvegassun.com/sunbin/stories/wasia/2006/jan/26/012600302.html.
28
Innovest Strategic Value Advisors. (2004). Dow Chemical: Risks for Investors. New York.
Institutes of Medicine (2003). Institute of Medicine Report: Characterizing Exposure of
Veterans to Agent Orange and Other Herbicides Used in Vietnam: Interim Findings and
Recommendations (April).
29
Vietnam Victims of Agent Orange Association. Cu Chi District. Retrieved on July 25, 2007: http://72.14.253.104/search?q=cache:8zsdQD6l4tMJ:www.leadingedgeinsights.com/Leading%2 520Edge%2520Insights/Writing_files/Cu_Chi_District.pdf.

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