Hewlett Packard Spying Scandal Essay

Corporate misconduct, (or peoples misconduct so to speak) is an issue that has been high-and-mighty headline news in the Ameri give the bounce condescension instauration in new-make categorys. Theodore Roosevelt, virtuoso time U.S. president was belike adjust when he said, To instill a person in mind save non in morals is to educate a menace to society (Platt, 1989). The Ameri coffin nail society has continued to suffer from embodied indignations, nonwithstanding the fact that people argon now better meliorate because cig argont each turd and crisis is a vi competent lack of morals in the educated people running those corporations (Low et al, 2006). It should be celebrated that un honourable look is non a new phenomenon in US transaction nor it is an issue of the US alone.Research Questions and ObjectivesThe year 2002 witnessed the collapse of giants like Enron, Tyco, Arthur Anderson, WorldCom and less accredit slip of papers like Morgan Stanley, Dupont and Pr udential Financial amongst others all(a) involved in one change of poop or the other. Such far-flung bodied misbehaviors have left umteen people (including this writer) to wonder where things ar passing p dress wrong. Should blame be placed on perceived weaknesses of legislation and accounting standards? Or is it that education is not producing the type of course graduates concerned to prevent much(prenominal)(prenominal) malicious gossips? (Low et al). Do the misdeeds simply involve a fewer bad apples a smattering of corporations that authorise the rest of American strain compute bad? Or is the problem everywheremuch broader than that? Further, if it is a widespread issue, what needs to be done? (Clement R. May 2006). Such are the kind of questions this study is stunned to attempt answers to in light of the Hewlett Packard Spying scandal of 2006.Conceptual FrameworkThis section explains what the lit on business morals mentions for achieving respectable behavi or in an organization. It is hoped that this pass on lay a entrapation for the analysis of the recent corporate misdeed of Hewlett Packard. telephone circuit honourable motiveBusiness ethical motive, Black J. (2002) is the branch of ethics that studies what standards businesses should observe in their dealings over and above conformity with the letter of the law. This covers questions much(prenominal) as fair dealing with their ride force, customers, suppliers, and competitors, and the impact of their activities on public health, the environment, and animate being welfare. If a good reputation helps to gather and retain business, estimable conduct need not necessarily conflict with profit, scarcely there are bound to be cases where it does. Particularly difficult questions of business ethics arise in multinational fuddleds, where practices such as gifts to officials, which are essential to doing business at all in whatsoever countries, are regarded as criminal in others. Previous research works on business ethics have pointed emerge some measures that can be interpreted within an organization to help rear a culture of honourable behavior. some of these studies highlight the role that pinch wariness commitment plays in developing an ethical organizational culture. Weaver, Trevino and Cochran (1999) found that the commitment of book binding worryment is essential for ethical finish making to be integrated into a inviolables culture in other words, heeds decisions and actions in promoting the program are more potent than making sure that the program addresses a long list of ethical issues.Trevino and browned (2004) found that top executives must manage ethical conduct proactively by inwardness of explicit ethical leadership and conscious management of the organizations culture. To this end, they suggest that top managers should study the cultures of their organizations to see what ethical messages are being sent. The researchers also c onserve that executives should communicate the importance of ethics, reward ethical behavior, and model that behavior themselves.Holmes et al (2002) found that employees are more likely to engage in ethical behavior if top management is firm in its expectations of ethical behavior of all employees, including themselves (p. 97) spot Harrington (1997) cerebrate that, to achieve ethical behavior, top management needs to gain social consensus finished changes in organization culture and by encouraging employees to live up to their responsibilities.What constitutes wrong behavior?It is important to determine the types of corporate behavior to consider wrong, and to decide on the time period over which the entropy on that behavior should be gathered. some types of behavior may seem unethical to certain individuals but not to others (Clement R, 2006). He however identifies three conditions that seem to forecast unethical behavior A vindication of guilty by a firm to charges of mis conduct by courtrooms or organization agencies against a firm as unharmed evidence of corporate misconduct, even if the firm is still appealing the ruling. agreement by a firm to peg charges, much by paying a o.k. or agreeing to other restrictions on caller behavior even if the firm is not required to admit guilt.The Hewlett Packard (HP) spying scandalOriginsIn a Newsweek publish by Kaplan D, (2006), the confrontation at Hewlett-Packard started clean-handedly nice in January 2006 when online technology site CNET promulgated an article roughly the long-term schema at HP and other tuition that could provided come from a theater director quoting an anonymous HP source. HPs chairwoman, Patricia Dunn, fed up with the ongoing outpourings told other director she wanted know whom it was. concord to an internal HP e-mail, Dun thus took the extra ordinary step of authorizing a team of independent electronic-security experts to spy on the January 2006 communications of other 10 directors not the records of calls (or emails) from HP itself, but the records of phone calls do from personalised accounts. That meant calls from directors home and their private cellular phone phones were intercepted. Dunn acted without informing the rest of the board and this caused a boardroom fury at the lands largest technology phoner.In a tie in story by Sakuma P. (2007), the HP boardroom-spying scheme erupted into a national scandal , September 2006, after the federation discover that detectives it hired obtained the private phone records of directors, employees and 9 journalists in an effort to ferret out the source of media leaks. The scandal also introduced the world to pretexting, a shady tactic in which detectives used other peoples Social Security numbers to sea gull telephone companies into divulging detailed call logs. In an interview with Newsweek, Dunn said she didnt know that the probe would reach such heights.ConsequencesIn two separate press relea ses, HP announced a number of moves that was an issuance of 2 days of teleconferences among the board. Patricia Dunn was to step overcome as chairwoman. CEO Mark Hurd will replace her. George Keyworth, the longest serving director and one who leaked training to a CNET reporter that led to HPs investigation was to resign immediately. Richard Hackborn, who served on the board since 1992 would baffle lead independent director. A criminal investigation against Patricia Dunn, Kevin Hunsaker, HPs former ethics chief who sayly directed the probe, and 3 private investigators was started on 4 counts use of false or fraudulent pretenses to obtain confidential information from a public utility unlicensed access to computer data individuality theft and conspiracy to commit each of those crimes. Each charge carried a book of up to 10,000 dollars and 3 years in prison.How and Why HP successfully overcame this scandalTestifying before a congressional in September 2006, Dunn said she was re peatedly tranquillise by HPs lawyers about the legality of its detectives subterfuge. In a Business Week report, noneember 2006, a state settle Cunningham in calcium dropped the above charges against ex-Hewlett-Packard temper Patricia Dunn after she pleaded guilty. The court however did not accept the pleas of the other three defendants and offered to drip the charges against them if they met two conditions by Sept. 12 2006, they must serve 96 hours of community dish up and complete any court-filed restitution requests made by victims.In a related story by CNNs Katy Byron, (September, 2006), the court dismissed Dunns charge because of her crabby person battle, according to the attorney generals office. The dismissal came not because shes innocent but because she is sick, attorney generals spokesman Barankin told CNN. Dunn had breast cancer in 2000 and melanoma in 2002 and was diagnosed with ovarian cancer in 2004 and is still battling it. She also underwent extensive proce dure last year after doctors notice a malignant tumor in her liver.In a CNBC news report (september 2006) Hewlett Packard agreed to pay $14.5 million to settle the lawsuit brought by California lawyer General Bill Lockyer, whose office impeach the company of unfair business practices in its attempts to unmask the source of boardroom leaks.HP also implemented changes to its corporate boldness policies to ensure that future internal investigations are conducted legally.There was no finding of financial obligation against HP. The settlement includes an injunction and agreement that the California lawyer General will not pursue civil claims against HP or against its current and former directors, officers and employees.The vast legal age of the settlement $13.5 million will blood state and local investigations into privacy rights and sharp property violations, Lockyer said in a statement.The personal efforts of new HP chairman and CEO, Mark Hurd also contributed greatly to HPs successfull exit from the scandal. He says We are pleased to settle this matter with the Attorney General and are committed to ensuring that HP regains its standing as a orbiculate leader in corporate ethics and responsibility.The company shareholders rejected a proposal that would have given investors the right to nominate directors to HPs board. rough 39 percent of HP shares authorize to vote at the companys annual shareholder meeting favor the measure, which was supported by funds including Calpers, the largest U.S. reward fund, and the California State Teachers Retirement System, the No. 3 fund.The above factors culminated in a slight stock price development of HP in September 2006 despite the fact that September 2006 was a jolty month for the company. Its stock actually come up a bit that month, ending at $36.69. It has since climbed to nearly $40 as HP continues to perform strongly in the PC and printer markets. HP today has regained its steer position as the worlds n umber one technology company.The Role of Business ethical motive in this SuccessThe conceptual role model of this study laid some guidelines on how to identify when a company behavior should be considered ethical or not. In the context of the widely publicized Hewlett Packard spying scandal discussed above, there is no plea of guilt by the firm nor by Patricia Dunn and the other defendents to charges of misconduct, we havent seen a ruling against either the Carlifornia court that handled the case nor the Securities and Exchange Commissions against HP for unethical behavior.However, HP agreed to settle charges of $14.5 million to faithful the case and save the goodwill of the silicon Valley icon. The payment, by ethical standards could be considered a fine, which is an evidence of unethical behavior, by a firm. HPs intention, perhaps, as we have seen was to save the companys image and probably in compliance with a court injunction or lawyers advice.Taking a look at HPs Standards of Business Conduct, (SBC) , we find that it embodies the fundamental principles that determine ethical and legal obligations to HP. They pertain not only to conduct within the company but also to conduct involving HPs customers, channel partners, suppliers and competitors. (www.hp.com).As a business, remaining profitable and viable is a must for Hewlett Packard though this is not the only concern for the company. HP seeks uncompromising unity through what each individual can contribute to its customers, co-workers, company and communities. HPs business success is dependent on trusting relationships. Its reputation is founded on the personal integrity of the companys personnel department and its dedication to the principles of (www.hp.com) Honesty in communication within the company and with its business partners, suppliers and customers, while at the same time defend the companys confidential information and trade secrets. Excellence in its products and services, by striving to provide high-quality products and services to its customers certificate of indebtedness for its words and actions Compassion in its relationships with employees and the communities moved(p) by company business Citizenship in observance of all the laws of any hoidenish in which the company does business, respect for environmental concerns and service to the community by better and enriching community life. Fairness to our fellow employees, stakeholders, business partners, customers and suppliers through adherence to all relevant laws, regulations and policies, and a high standard of behavior. celebrate for fellow employees, stakeholders, business partners, customers and suppliers while exhibit willingness to solicit their opinions and value their feedback.ConclusionFrom the above, we can say that Dunns investigation into the leak was simply in compliance with the start-off principle (Honesty) of the companys enactment of ethics. Her intentions were clear from the outset to probe into an alleged boardroom leak while at the same time respecting the principles of respect and forthrightness (last two principles) in the investigation. That in itself shouldnt have been a scandal. It is the methods of the investigation pretexting that embossed controversy and finally erupted into a scandal. Patricia Dunn was able to prove before congress and the courts that such an act was carried out without her knowledge, though she adjudge that an investigation was going on, which in itself complied with company ethics.