CASESTUDY – BIG BROTHER AT PROCTER AND GAMBLE

PRESENTED BY – SANDEEP BANERJEE

BUSINESS ETHICS PRESENTATION

ABOUT PROCTER AND GAMBLE

PROCTER & GAMBLE IS A FORTUNE 500 AMERICAN MULTINATIONAL CORPORATION HEADQUARTERED IN DOWNTOWN CINCINNATI, OHIO THAT MANUFACTURES A WIDE RANGE OF CONSUMER GOODS.

IT IS 6TH IN FORTUNE'S MOST ADMIRED COMPANIES 2010 LIST.

P&G IS CREDITED WITH MANY BUSINESS INNOVATIONS INCLUDING BRAND MANAGEMENT AND THE SOAP OPERA.

CORE STRENGTHS OF P&GP&G FOCUSES ON FIVE CORE STRENGTHS

REQUIRED TO WIN IN THE CONSUMER PRODUCTS INDUSTRY.

MAIN ELEMENT OF THIS CASESUDY

EMPLOYEE PHONE RECORDS WERE EXAMINED IN COMPANY'S SEARCH FOR NEWS LEAKS

LAW-ENFORCEMENT AUTHORITIES IN OHIO, ACTING ON A COMPLAINT BY THE PROCTER & GAMBLE COMPANY, OBTAINED THE TELEPHONE RECORDS OF EMPLOYEES - WHO THE COMPANY SAID DISCLOSED TRADE SECRETS TO A REPORTER FROM THE WALL STREET JOURNAL.

THE JOURNAL, WHICH REPORTED THE INVESTIGATION , SAID IT RESULTED FROM TWO ARTICLES THE NEWSPAPER PUBLISHED .

ONE ARTICLE QUOTED UNIDENTIFIED "COMPANY INSIDERS" AS THE SOURCES OF REPORTS THAT B. JURGEN HINTZ, THE EXECUTIVE VICE PRESIDENT IN CHARGE OF THE PROCTER & GAMBLE'S FOOD DIVISION, WAS BEING PRESSURED TO RESIGN.

THE SECOND QUOTED "CURRENT AND FORMER" COMPANY MANAGERS AS SAYING THAT THE COMPANY MIGHT SELL SOME UNPROFITABLE OR LOW-PROFIT FOOD BRANDS, INCLUDING CITRUS HILL ORANGE JUICE AND CRISCO SHORTENINGS.

THE NEWSPAPER REPORTED THAT LAW-ENFORCEMENT AUTHORITIES WERE SEEKING TO DISCOVER WHICH, IF ANY, CURRENT OR FORMER PROCTER & GAMBLE EMPLOYEES DISCLOSED INFORMATION THAT THEY REGARDED AS CONFIDENTIAL .

PAUL E. STEIGER, THE MANAGING EDITOR OF THE JOURNAL, CALLED THE INVESTIGATION "AN EFFORT TO INTIMIDATE CURRENT AND FORMER EMPLOYEES FROM TALKING TO REPORTERS.

OHIO LAW PROTECTED REPORTERS FROM BEING FORCED TO DISCLOSE CONFIDENTIAL SOURCES OF NEWS.

BUT SUCH SHIELD LAWS DO NOT PROTECTED THOSE WHO DISCLOSE INFORMATION IF THEY ARE IDENTIFIED THROUGH OTHER ROUTES.

PROCTOR & GAMBLE GOT THE PHONE COMPANY TO SEARCH 800,000 PHONE RECORDS FOR BUSINESS LEAKS

THIS RESULTED IN POOR PUBLIC RELATIONS FALLOUT AND REDUCED THEIR GOODWILL AMONG PUBLIC .

THE CRITICS OF P&G SAID THAT THIS HEAVY- HANDED INVESTIGATION DID NOT CITE ANY HARMFUL CONSEQUENCES BEYOND THE CHILLING EFFECT IT MIGHT HAVE HAD ON EMPLOYEES AND MEMBERS OF PRESS .

THEY COMPLAINED INSTEAD ABOUT THE ABUSE OF POWER AND INVASION OF PRIVACY .

CHARGES AGAINST P&G

P&G WAS CHARGED WITH VIOLATING CERTAIN RIGHTS :-

1) THE RIGHT OF REPORTERS TO SEARCH OUT NEWSWORTHY INFORMATION.

2) THE RIGHT OF ORDINARY CITIZENS NOT TO HAVE THEIR TELEPHONE RECORDS CHECKED.

AFTER EFFECTS

PROCTOR & GAMBLE CO., THE CORPORATE GIANT AND OTHER INVOLVED PARTIES REMAIN ON CLEANUP DUTY, TRYING TO REPAIR RELATIONS WITH THE MEDIA.

AS THE STORY WOUND INTO ITS FIFTH WEEK IN MID-SEPTEMBER, IT BECAME CLEAR THAT THE COMPANY, AS WELL AS CINCINNATI BELL TELEPHONE, CO. AND LOCAL LAW ENFORCEMENT, NEVER ANTICIPATED THE FIRESTORM CAUSED BY THE INVESTIGATION, WHICH P&G AND POLICE SAY DID NOT PRODUCE ENOUGH EVIDENCE TO BRING ANY CHARGES.

THE STORY WAS PICKED UP BY SCORES OF OTHER MEDIA ORGANIZATIONS – FROM THE NEW YORK TIMES TO TIME TO ELECTRONIC MEDIA .

MOST DAILIES CONTINUED COVERAGE FOR SEVERAL DAYS, SOME FOR WEEKS. AT MID-SEPTEMBER, LOCAL MEDIA WERE STILL FOLLOWING THE STORY.

P & G COUNTER ATTACK

P&G LAUNCHED A COUNTERATTACK AND THEIR TASK WAS CONVINCE THE MEDIA THAT THE COMPANY WAS NOT TRYING TO QUASH FIRST AMENDMENT OR PRIVACY RIGHTS, BUT SIMPLY HOPING TO IDENTIFY A LAWBREAKER.

THREE WEEKS INTO THE MESS, P&G CHAIRMAN EDWIN L. ARTZT APOLOGIZED TO EMPLOYEES AND THE PUBLIC FOR THE COMPANY'S "ERROR IN JUDGMENT."

PERSON BEHIND THE LEAK

CINCINNATI POLICE ASSIGNED A P&G PART-TIME SECURITY CONSULTANT AS THE PERSON BEHIND THE LEAK.

WHEN P&G DISCLOSED, A WEEK INTO THE STORY, THAT POLICE INVESTIGATOR GARY ARMSTRONG HAD BEEN MOONLIGHTING AT ONE OF ITS RESEARCH FACILITIES SINCE 1977, IT RAISED ADDITIONAL CONCERNS ABOUT ABUSE OF CORPORATE POWER.

BY THEN, THE COMPANY HAD ALREADY BEEN CRITICIZED FOR ASKING POLICE TO INVESTIGATE WHAT WAS ESSENTIALLY AN INTERNAL COMPANY PROBLEM.

• INVESTIGATOR ARMSTRONG DECLINED TO COMMENT FOR SEVERAL DAYS, LEAVING SIGNIFICANT QUESTIONS UNANSWERED.

THANK YOU