Case Analysis 1

This report will argue that the actions of Hewlitt-Packard (HP) chairwoman Patricia Dunn in the investigation into boardroom leaks that resulted in the use of highly intrusive methods of surveillance were ethically impermissible. I will begin by describing the relevant facts pertaining to the investigation into the leaks and two ethical concepts that will be used to inform my argument i.e. stakeholders and moral blindness. I will then proceed to argue that by instigating the investigation Dunn bore full responsibility for the methods employed and the resulting fallout.

A series of damaging leaks from the HP boardroom resulted in the commissioning of an investigation by the Dunn, which was in line with her duties as HP chairwoman. Dunn approved the use of private detectives who were recruited in such a manner as to keep HP executives from ascertaining knowledge about the scope of the investigative procedures. The investigation utilized a series of investigative techniques that fell into a grey area legally. One such technique was pretexting which “…involves pretending to be a phone subscriber in order to gain access to phone records, which could then be used to check whether employees or board members had been phoning journalists…” (pg. 85). Kevin Hunsaker, the senior attorney in charge of corporate compliance and ethics for HP, was assigned the conflicting role of leading the investigation into the leaks. Hunsaker performed his duties with the knowledge that top-level authorization was needed to spy and that this course of action was ethically questionable at best, if not illegal. Dunn denied knowledge of any of the operational details of the investigation while maintaining her position that “…every company has investigations. Investigations by their nature, are intrusive…” (pg. 85), and eventually left her position with the company.

There are two ethical concepts relevant to this case. The first concept is the notion of a stakeholder, which can be defined as “… the broad constituency served by business. As such, they have a deemed interest in what a firm does in order to earn profits…” (pg.69). This concept highlights the need for the interests of all groups affected by a decision to be given some weight. Moral blindness, the second concept  “…amounts to a failure to see that a moral issue exists at all…” (pg. 27). The inability of Dunn to recognize her responsibility for the investigation, which arose when she set it in motion, approved of investigators, and did not involve the board, amounted to moral blindness. The inability to address the ethical matters that arose in the course of the investigation resulted in an investigation with no ethical guidelines.

I will begin my argument by expanding upon the concept of stakeholders in relation to this case. The investigation was initiated to put an end to the leaks that were seen as damaging to the reputation of HP. This solution resulted in the extensive “…surveillance on reporters, HP employees and the suspected leader…” (pg. 84), that served only to benefit the shareholders of the company who had a vested interest in determining who the source of the leak was to avoid further damage to the reputation of the company. What the company, and Dunn in particular failed to acknowledge was that the interests of shareholders were not the only interests that should have been considered. The interests of the stakeholders, which included the HP employees and board members, not only were ignored but the investigative methods used were contrary to their best interests. This failure to consider the interests of all parties involved allowed for the scope of the investigation to become disproportionate to the offence and resulted in the very thing it was trying to avoid, damage to the reputation of HP.  Had Dunn considered and weighed the interests of other stakeholders, the decision to use intrusive investigative methods would have been decided against.

The actions of Dunn in the wake of the scandal are indicative of how the scandal came to be in the first place. Dunn denied any responsibility for her role in the scandal and refused to even acknowledge that the investigation raised any ethical issues. Dunn operated under the assumption that responsibility only existed for actions taken that she was made expressly aware of. In contrast to this view the courts found that she bore responsibility for the conduct of those involved in the investigation by virtue of her bringing them into HP. As a top-level executive, who initiated the investigation, Dunn’s moral blindness allowed for those working underneath her on the investigation to bury ethical objections. Assigning Hunsaker, the senior attorney in charge of ethics to lead the investigation, posed a clear conflict of interest and created an environment in which no one addressed the ethical implications that arise in the course of an investigation.

Dunn’s decision to hire private investigators, who in turn subcontracted work to firms in order to cover their tracks, was a deliberate effort to keep HP employees from gaining knowledge about the investigative procedures. Dunn made the conscious choice to launch an investigation that lacked transparency, without the approval of the board and thus assumed full responsibility for the events that transpired. Her actions cannot be defended by claiming that board members open themselves up to being investigated, or that other companies have launched similar investigations into their employees. These claims have no merit and are what resulted in an investigation that overstepped clear ethical boundaries. The argument Dunn tried to advance that other companies also investigated their employees and thus HP board members should have been prepared for this possibility cannot be used to relieve her of responsibility. First of all, the investigation extended beyond HP employees to journalists, and secondly the investigation used techniques that fell into a legal grey area and were not within the scope of a normal investigation. Ethical guidelines should have been outlined at the outset of the investigation, and the failure to do so rests solely on Dunn’s shoulders.

Works Cited:

  1. Grace, D, Cohen, S., & Holmes, W.R.. Business Ethics: Canadian Edition (2013). Oxford University Press.