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1、www.hbrreprints.orgHBRCASESTUDYANDCOMMENTARYHowshouldWhyDidn’tWeKnow?GalvatrensstrengthenitssystemforbyRalphHassonuncovering•misconduct—andwhatrolesshouldtheboardandmanagementplay?Fourcommentatorsofferexpertadvice.ReprintR0704AAwhistle-blower’slawsuitalertsGalvatrenstodeepflawsinitssystemforuncov
2、eringmisconduct.Howshouldmanagementandtheboardrespond?HBRCASESTUDYWhyDidn’tWeKnow?byRalphHassonItwas9:30intheeveningofwhathadbeenaingthepastfourweeks.TheplaintiffwasMikeverylongFridaywhenthephoneranginChipFields,whohadleftGalvatrensthreeweeksear-Brownlee’shomestudy.OnthelinewasArchlier.Heclaimedt
3、hathe’dcomeacrossaplanCarter,theleaddirectorofGalvatrens,thedevisedbyGregWilson,anotherdivisionalsalesHouston-basedconsumerproductscompanymanager.AccordingtoMike,Greghadpro-thatChiphadledaschairmanandCEOfortheposedshippinggoodstoafewofhisbiggercus-pasttenyears.tomers,billingthem,andbookingthesale
4、s—“Ijustgotyourvoicemail,”Archsaid.“Thebutwithasideagreementthattheywouldn’tpartsaboutalawsuitandaccusationsthatwehavetotakeownership,couldreturntheship-manipulatedoursalesnumberscertainlygotmentsatanytime,andwouldgeta2%discountmyattention.What’sgoingon?”onanygoodstheyacceptedandpaidforinthe“Atth
5、ispoint,Idon’tknowmuch,”Chipre-followingquarter.Thepurposeofthechannel-sponded,“butIwantedtogiveyouaheads-up.stuffingschemewastomeetquarterlysalestar-Aformerdivisionalsalesmanagerhasfiledagetsandtriggerbonuses,Mikecontended.lawsuitagainstthecompany,charginghewas“Sowhat’sthewrongfulterminationcharge
6、wrongfullyterminatedbecausehetriedtore-about?”Archasked.portanillegalschemetoinflatesales.”“MikesayshefoundoutabouttheschemebyChiphadreceivedacopyofthelawsuitthataccidentand,sincehedidn’tknowwhoelseafternoon.Ashe’dreadthroughthecomplaint,mightbeinvolved,contactedHarryaboutit,”he’dgottenawholenewpe
7、rspectiveontheChipsaid.Inthelawsuit,MikeclaimedthathemultipledeparturesthathadrockedSalesdur-hadleftaconfidentialvoicemailforHarryMart,OPYRIGHT©2007HARVARDBUSINESSSCHOOLPUBLISHINGCORPORATION.ALLRIGHTSRESERVED.CHBR’scase
