Corporate Misconduct and Organizational Parricide

by Magnus D. Spamer

Case Study:

The opportunistic exploitation of private corporations on their employees, and parent companies, in light of the Covid-19 Pandemic.

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On the 26th of March 2020, the world as we knew it changed, and something ugly reared its head in South Africa: Organizational Parricide and Corporate Misconduct.

To understand the climate in which these events play out, we need to establish the foundations and relationships that exist within this corporate universe.

Ford Motor Company (FMC), known to most as the creator of the Mustang, the iconic 1960's American muscle car, and recognized for being the first to use an Assembly-line to manufacture automobiles. They made history, by reducing production times from 12 hours, down to just 2 hours and 30 minutes.

Ford means business, boasting with over 170,000 employees' in almost 200 countries.

How are business giants like FMC able to control and manage it all, you ask? Well, they rely on Subcontractors or BPO's to help effectively manage, control, and monitor resources on their behalf. 

HPB International, the BPO in question, helps mitigate employment risks and assists FMC with the management and employment of local workers. 

"You work for us, but you're not technically employed or paid by us.", as James, the FMC employed Project-Manager bluntly explained. "We inform HPB on what we are looking for and what needs to be accomplished within the project, and they're in charge of finding, and employing the right person."

James requested that a new "Admin Manager" be assigned to the team to help out with the workload. James is the go-to person if you want to get something done. He is also the key contact person between FMC and HPB and has authority over the team and their operations.

Jennifer had been appointed to the position of "Admin Manager" on the FMC project called the Fraud Intervention Team or FIT for short. HPB offered her a salary of R25,000 per month. Content with the offer she signed the contract. Jennifer is now an HPB employee, working for FMC.

HPB proceeds to invoice FMC, R32,000 per month for the position, which includes a commission, the candidates' salary, and handling fees.

After the Lockdown announcement, local businesses went into a panicked frenzy. Unable to trade, they desperately try to cut costs where ever possible, starting with their employees. Some were let-go, others received pay-cuts, all in an attempt to keep business afloat. 

There's no doubt that these effects were felt globally, changing the way we interact, and how we behave. Distancing ourselves socially, from each other, and emotionally from ourselves, the latter proving more worrisome and destructive, seeing as businesses were following suit, laying-off workers, via swift and impersonal video-conference-calls. 

HPB was no different in their approach, sending out a vague email late one Saturday afternoon, noting a 20% salary reduction. Assuming that no one would read this life-altering email, heaven forbid they reply. A disembodied and cowardly way of delivering such a content-rich and personal message.

Monday morning, HPBs' Human Resources manager Kim, was inundated with emails and phone calls as could be expected. 

The team demanded an explanation. "Who gave this order? How did they come to this decision without proper deliberation or discussion with the team?"

On the 21st of April, the Country's President announced that it would receive a cash injection of R500 billion, to relieve the ailing economy and assist businesses that had been affected due to the pandemic.

This meant that businesses who were cash strapped and struggling to pay their workforce could apply for a financial subsidy to continue paying their employees a full salary.

Jennifer felt slightly better after hearing the presidents' announcement and did not put any more thought into the matter. 

A week later, Jennifer had a brief conversation with James. They end up making small talk about the announcement and the salary reduction. He informs Jennifer that FMC had already set funds aside for her position and that she should technically not be subject to any deductions for the duration of the project.

Kim informs the team about the relief fund and suggests that they apply for financial relief directly from the government.

In the meantime, HPB still deducts 20% of the team's monthly salaries and unbeknownst to anyone, also applied for financial relief.

FMC notices that HPB is holding back part of the team's salaries and still charges FMC the full amount, he emails that head of HPB and asks for clarification on the matter. The response from HPB was discouraging and came across as unimportant to them.

James gets his team together to discuss matters. They conclude that HPB is gaining much more than previously realized. Taking Jennifer's salary, for example, HBP pays 20% less to her and claims from the government for the deducted amount, so 20%. HPB now sits with 40% more money than before and still charging the full amount to FMC, effectively walking away with a handsome earning of R17,000.

Jeniffer, now stuck with the fact that her employers are not just taking advantage of her, but also FMC, the people she works for. Whom does she approach with this information, and what happens to her if she tells someone?

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This case study is an Organizational Decision-case, based on independent research done by the author. Pseudonyms were used to protect anonymity, and certain situations had been remodeled. This case study exposes the opportunistic exploitation of private corporations on their employees, and parent companies, in light of the Covid-19 Pandemic.

Learning Objectives:

1. Learn how to create a response to deal with Employer "Failure to follow Wage Laws" & "Breach of Contract."
2. Helps to decern between helpful or hindering information and gossip.
3. How to spot Corporate Misconduct.
4. Understand the importance of Dissent and Debate within a team and Organization.
5. Recognize how hidden forces of context, systems, institutions, and interactions design affect group interaction

Key Terms:

• BPO: Technology-enabled Business Process Outsourcing (BPO) not limited to Services but also Resources.
• Parricide: The act of killing a person who stands in a relationship resembling that of a Parent.
• Dissent and Debate: The team had not been consulted or forewarned about possible changes, if they'd been, they could have possibly come to a better conclusion, together.
• Embodiment: The message sent to the team on a Saturday afternoon was is a classic example of "Disembodiment".
• Conflict Management: Sending the email knowing that not many would read it, Kim was trying to avoid any conflict, instead of welcoming it.
• Professional Group: The FIT team is a Professional group
• Decision-making trap "Status-Quo": The employers who were laying off their staff via Video call.
• Media Richness: The email lacked the media richness for such an Unambiguous message.
• Conflict Negotiation: Jennifer is stuck with the questions. Does this need to be said by me, now? or does she leave it up to James?

Character Summary:

• Jennifer: A young, ambitious Data Analyst having worked close to the FIT team and now excited to join the team and make a difference.
• James: A North American, Project Manager with more than 30 years of experience with FMC on multiple projects in multiple countries.
• Kim: An inexperienced Human Resources manager placed in a position of power due to her connections within the HPB organization

Discussion Questions:

1. How would you deal with an unresponsive and incompetent HR manager?
2. How do you report Corporate Misconduct?
3. What governing body regulates and deals with instances like this?
4. How do you prevent yourself from ending up in this situation?
5. What would you have done if you were in this situation?

Further Reading:

Corporate Misconduct

https://www.slideshare.net/licoreis/dealing-with-corporate-misconduct

Ford Motor Company

https://www.britannica.com/topic/Ford-Motor-Company

**Recognize how hidden forces of context, systems, institutions, and interactions design affect group interaction