You'Ve Got Questions

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Case Application Summary

When we read the new OBM case application in chapter 5 we understood many new things about company ethics and responsibility. In this case we were introduced in a true story of RadioShack Corporate Company. The story is about company’s CEO David Edmondson and his fall as a chairman of it. He lied about his educational background that helped him to take the CEO-seat from Len Roberts. One of the first signs was marked from the newspaper “The Fort Worth Star Telegram” who reported a huge article for him. After his hiring as a new CEO the company lost its positions and the result was that share price dropped to a 3 year low level. Mr. David Edmondson neglects the Company ethics and than he was fired. The strange part
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Edmondson's work. They did not want to make the situation worse and loose more customers who have a huge impact on the company’s profits.

Question 4: What impact do you think the company’s severance package to Mr. Edmondson might have?

Answer 4: The company’s employees will be dissatisfied when a CEO who has lied about his background receives a severance package of over a million US dollars. This might lead to demotivated employees. Also the stockholders will not be happy to hear this. It’s their money which is being given away to a ‘’bad’’ person. In general the company’s image has been damaged. In the worst case this might lead to decrease of sales.

Question 5: Could an organization ever prevent a situation like this from happening? Why or why not? What could you do? How could the company’s Code of Ethics play a role? Go to the company’s Web Site (www.radioshach.com) and take a look at its Code.

Answer 5: An organization/company can and must prevent situations like this from happening! In every school, university or working place you can find a simple info for a person had been there. When some one wants to be accepted in a company the HR managers should not only check the CV and if it looks good to hire him. They are supposed to check on his past to see if he is telling the true in his CV and it is not such a big job. True sometimes is a few phone calls away. However a lot of organization do not check this

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