978-0132953511 Part 7 | Course Paper

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1992 Michael Jeffries, current CEO, hired and reinvigoration and branding of

A&F begins in earnest.

1994 A&F becomes financially successful again.

1996 A&F enters NYSE.

1997 A&F launches A&F Quarterly.

1998 Abercrombie completes public acquisition and completely spins off from

the Limited.

2002 A&F releases line of racially insensitive T-shirts and comes under fire

from public.

2003-2004 First class-action lawsuit brought against A&F for racial discrimination; a

second suit follows five months later; a third class-action suit for gender

discrimination follower shortly after and all three are subsequently

combined for mediation purposes.

2005 Abercrombie & Fitch settle suit, but deny any wrong-doing.

Discussion Questions

1. How did the positioning of Abercrombie & Fitch’s “Classic American” brand lead to

class-action lawsuits regarding racial discrimination?

2. Did Abercrombie respond appropriately to the terms of the settlement and has the

company shown improvement in regards to diversity?

3. What further changes can Abercrombie take to become more diverse?

4. Is it important for top management to be as diverse as the workforce?

5. How can Abercrombie & Fitch repair its image with the public?

6. Did Abercrombie & Fitch do anything wrong? Is hiring on the basis of looks wrong?

MAKING THE CUT OR ON THE ROPES: A PLAY-BY-PLAY ANALYSIS OF DIVERSITY

AND SPORTS IN THE NFL, NASCAR, PGA, & NBA

This teaching note was prepared by McCall Lewis, MBA (David Eccles School of Business,

University of Utah).

Purpose of the Case Study

1. To help students understand the challenges faced by minorities and women at different

levels within NFL, NASCAR, PGA, and NBA.

2. To provide students with a brief overview of the history of diversity in professional

sports organizations.

3. To illustrate how professional sports organizations are managing diversity and

addressing diversity challenges and issues.

4. To provide students with examples of initiatives and programs implemented by different

sports organizations.

Identifying the Business Problem

Some professional sports organizations manage diversity well. They implement and

promote initiatives and programs that foster diversity at all levels of the organization.

Other professional sports organizations do not manage diversity effectively. As a result,

minorities and women face challenges that impede their ability to enter or move up

within the organization.

Forecasting the Most Desirable Outcome

NFL, NASCAR, PGA, and NBA continue to implement initiatives and programs to

increase diversity within each respective organization, and serve as examples for other

organizations in and out of the sports industry.

Identifying the Critical Issues

1. NFL adopted the Rooney Rule which requires teams to interview at least one minority

candidate for every open head coach and general manager position. The number of

minorities in those positions has increased.

2. Only a handful of minorities have participated in NASCAR events.

3. NASCAR’s Drive for Diversity program was established to provide minority and female

drivers with development and training necessary to progress. None of the program’s

participants have reached high level competition.

4. Minorities represent a small percentage of golf-playing Americans.

5. Through the Golf Industry Supplier Diversity Initiative, the PGA encourages business

with minority- and women-owned suppliers.

6. The NBA manages diversity well on most levels within the organization. It has been able

to increase racial and gender diversity through its recruitment and hiring practices. On

the other hand, it still experiences racial discrimination and sexual harassment.

Stakeholder Perspectives Include:

 Minorities (employees, athletes, candidates, etc)

 Management (both the organizational and team levels)

 Employees

 Athletes

 Spectators/Fans

 General Public

Possible Solutions to the Problem

1. In order to increase the number of minorities in head coach and general manager

positions even more, the NFL should consider implementing training and mentoring

programs for minorities. These types of programs would help the candidates become

more competitive and successful in the interview process and, once hired, in the

workplace.

2. NASCAR and the PGA should consider sponsoring programs that help grade school

youth develop the skills necessary to succeed within these organizations. These types of

programs would give youth the opportunity to train and learn earlier, which will help

them become more competitive in the future.

3. The NBA should continue to increase the diversity of its workforce. For example, the

organization could implement a program to increase the number of women referees.

Teaching the Case

1 Week Prior

Distribute the case at least one lesson prior to when you will discuss it in class. Tell the

students that you intend to focus on several matters during the discussion, including:

– Barriers for minority candidates in the sports industry

– Business issues in a sports-oriented case

– Role of diversity in all levels of a sports organization

First 30 Minutes of Class

Spend the first 10 minutes of class reviewing the main facts of the case including a brief

description of each sports organization and its history, and the strategies each

organization uses to increase diversity.

During the next 20 minutes, students should identify and discuss at least the following

topics.

– What is the role of diversity within sports?

– Compare and contrast diversity issues faced by each organization

– Compare and contrast organizations and their initiatives/programs to increase

diversity

– Analyze strengths and weaknesses of diversity initiatives implemented by each

sports organization

– Identify possible ways each organization could improve

Summarize Students’ Responses

Ask students for their opinions on which of the sports organization described in the case

is doing its best to address diversity challenges and to create a diverse and inclusive

workplace.

Issues to consider:

– What makes this particular organization the best?

– What could the other sports organizations learn from this organization?

Last 15 Minutes of Class

Conclude the discussion.

Timeline of Events

1948: NASCAR is officially established

1963: Wendell Scott wins cup-level NASCAR event; becomes the only minority to do so

1990: PGA Championship held at Shoal Creek Golf and Country Club of Birmingham,

Alabama Augusta National admits first minority members

2002: National Football League creates “Committee on Workplace Diversity”

2003: The Rooney Rule was implemented by the National Football League

2004: NASCAR introduces Drive for Diversity (D4D)

2007: First appearance in the Super Bowl by a team with an African American head coach

2008: University of Maryland Eastern Shore offers “Golf Management University Program” as

a major

2012: Augusta National admits first women members

Discussion Questions

1. Established in 2003, the Rooney Rule requires all National Football League organizations

to interview a minority candidate for every head coaching vacancy. What measures can

be taken by the league to ensure that NFL organizations are actually considering

minority candidates, rather than bringing them in for interviews just to satisfy the rule?

2. NASCAR’s Drive for Diversity (D4D) has been criticized for its limited success to date.

What, if anything, would you propose to improve this program? Would you recommend

increasing the number of candidates accepted each year? (Currently there are 8 to 12

individuals accepted.) Can you think of a better program you would institute to improve

NASCAR’s participation from minority drivers?

3. Many golf clubhouses and courses are privately owned; as such, should they be allowed

to restrict access and membership to a homogeneous group of people?

4. Considering that the NBA denies any referee bias, how can the league ensure fairness on

the court? How could an independent entity oversee referee evaluation?

5. Consider diversity issues in other major sports organizations not discussed in this case,

such as Major League Baseball (MLB), Major League Soccer (MLS), National Hockey

League (NHL), and/or Ultimate Fighting Championship (UFC). What are the key

diversity challenges faced by these organizations? How are these issues similar to the

NFL?

TEXACO, INC.: RACIAL DISCRIMINATION SUIT

This teaching note was prepared by Lisa Gollan under the direction of James S. O’Rourke

(Eugene D. Fanning Center for Business Communication; Mendoza College of Business;

University of Notre Dame).

Purpose of the Case Study

1. To give students an appreciation for the pressures executives feel when conditions

change rapidly and they are confronted with uncertainty and ambiguity.

2. To provide students with an understanding of how valuable effective crisis management

can be for corporations that find themselves in unintended situations.

3. To help students understand how to restore the confidence of stakeholders after it is

diminished.

4. To give students an appreciation for the importance of effective communication, both

internally and publicly, to the long-term success of any business enterprise.

Identifying the Business Problem

Texaco Chief Executive Peter Bijur has been six months at the helm. His company’s

history of hiring and promoting minorities is less than exemplary. The company has a

$520 million employment discrimination lawsuit pending, which was filed in 1994 by

employees. Texaco executives were recently taped making disparaging remarks about

minorities and discussing the disposal of documents related to the class-action

discrimination suit. Transcripts leaked to the press have stirred public outrage in the

African-American community. Bijur must act quickly to counter the newspaper report

and prevent further damage to the corporate name.

Forecasting the Most Desirable Outcome

The organization deals with this situation quickly and effectively, and moves forward to

make Texaco a model of workplace opportunity for all men and women.

Identifying the Critical Issues

1. Protecting the corporate image.

2. Improving stakeholder relations; especially in the African-American community.

3. Improving the corporate culture; valuing diversity.

4. Settling the pending discrimination lawsuits.

5. Limiting media focus and dissuading further decline in the stock price.

Stakeholder Perspectives Include:

Employees. Since the 1980s, the company had shed thousands of employees in an effort to

stay competitive. Due to the major layoffs over the recent years, employee morale is

already low. In 1996, for the first time in almost a decade, Texaco’s payroll grew instead

of shrinking. At this point, Texaco employed around 27,000 employees worldwide. The

company appeared to have disproportionately lower levels of minorities in roles of

authority, as compared to Caucasians.

African-American community at large/Customers. When the New York Times went to press

the public was outraged. Rev. Jesse Jackson immediately became the voice of the black

community. He called for them to cut up Texaco credit cards, and boycott the

independent Texaco dealers. The Texaco incident took on a greater public sentiment,

which reflected a wider scope of discriminatory issues.

Investors. At the time of the case in 1996, Texaco ranked #11 on the Fortune 500 list.

The press caused the market analysts to recognize the potentially disastrous effects on

the business. The company’s stock plummeted.

Government bodies. The Equal Employment Opportunity Commission (EEOC) had

reviewed the lawsuit against Texaco, and the company’s employment practices. It found

that promotional opportunities for black workers were significantly lower than their non-

black counterparts. The Department of Labor (DOL) also conducted a study of one of the

Texaco divisions and found that minority employees were promoted more slowly than

their non-black counterparts. The DOL ordered the company to pay compensation and

revise its company-wide appraisal system.

And a comment on media relations. The New York Times broke Texaco’s racial discrimination

fiasco to the public at large. The media will be scrambling for updates to keep this story

newsworthy and alive. The company does not want to be in a position where they fuel

the media’s fire.

Possible Solutions to the Problem

Responsibility for the strategy to restore confidence lies with the CEO, Bijur. He must act

quickly and decisively to limit the impact on the company’s public image. The following

steps are recommended:

1. Immediately hire an independent external resource to investigate the claims that senior

managers made disparaging remarks and discussed destroying documents related to the

class-action discrimination suit. The external resource will report all findings on a regular

basis directly to Bijur. To limit further embarrassment and cost, Bijur and Texaco must

react quickly to the suggestions and findings of this independent body.

2. Call a meeting with the permanent, internal crisis management team comprising people

from operations, marketing, risk, and legal departments. The team will meet regularly to

report on and address issues.

3. Communicate with stakeholders. Brief them on the company‘s strategy (developed by the

crisis management team) to remedy the business problem.

4. Address the employees.

5. Issue a press statement and call a press conference the same day.

6. Address the investors.

7. Work hard to improve the relationship with government bodies – EEOC and DOL. Their

support is extremely important to the company.

8. Work with the African-American community in an effort to come up with a mutually

agreeable employment situation. This will improve the public perception of the company.

9. Consider settling lawsuits out of court and removing the situation from the public forum.

If Bijur does all this now, he has a much better chance of controlling the damage and reviving

the company’s public image.

Part B of the case provides Texaco’s actual business solution to Part A of the case. We learn

the company moved swiftly and decisively to combat the debacle. Note the Board of

Directors’s involvement, a crucial ingredient in moving to end the lawsuit quickly.

Explaining How to Communicate the Solution

Bijur will work hard to restore and rejuvenate the public’s image of the company.

Opening all communication channels is key.

Texaco’s message is:

 The company is embarrassed by the incident related in the New York Times and

apologizes to stakeholders

 The company believes that racial discrimination is not commonplace at Texaco

and in the past has made strides to improve minority presence

 The company will move quickly to eliminate any discriminatory behavior from

the workplace

The communication solutions formulated by Texaco can be found in Exhibits in Part B of

the case. These Exhibits demonstrate how Texaco moved smartly to protect its public

image. Note the short timeframe for the extensive communication effort that Texaco

undertook in the aftermath of the New York Times story.

Exhibit 3 Texaco’s initial press release concerning taped racial slurs (Nov 4, 1996).

Exhibit 4 Letter to employees of Texaco from the Chairman & CEO, Peter I. Bijur

(Nov. 4, 1996).

Exhibit 5 A message from Peter I. Bijur, Chairman & CEO of Texaco Inc. to all employees

via satellite broadcast (Nov 4, 1996).

Exhibit 6 Chairman & CEO, Peter I. Bijur’s statement to the press (Nov 6, 1996).

Exhibit 7 Remarks made by Chairman & CEO, Peter I. Bijur, following meetings with

leaders in the African-American community (Nov 12, 1996).

Exhibit 8 Texaco announces settlement in class action lawsuit (Nov 15, 1996).

Exhibit 9 Statement to company employees concerning lawsuit settlement (Nov 15,

1996).

Exhibit 10 Texaco announces comprehensive plan to ensure fairness and economic

opportunity for employees and business partners (Dec 18, 1996).

Teaching the Case

1 Week Prior

Distribute Part A of the case at least one lesson before you intend to discuss it in class.

Tell the students that you intend to focus on several matters during the discussion,

including:

 The pressures executives feel when conditions change rapidly and they are

confronted with uncertainty and ambiguity.

 How valuable effective crisis management can be for corporations that find

themselves in unintended situations.

 Restoring the confidence of stakeholders after it is diminished.

 The importance of effective communication, both internally and publicly, to the

long-term success of any business enterprise.

First 30 Minutes of Class

Spend the first 5 to 10 minutes of the class session briefly recapping the facts of Part A of

the case. Then for the next 20 minutes, have the students identify the following:

 The critical issues involved in Texaco’s business dilemma.

 The stakeholders in this case and their separate interests; review the

pertinent assumptions made by each of the stakeholder groups.

 The decision options available to the organization.

Use the Questions for Discussion relating to Part A to aid student discussion, if needed.

Summarize Students’ Responses

Ask students for their communication plan. What would they have done if they had been

in CEO, Peter Bijur’s shoes? Issues to consider include:

 Strategic Communication Objectives. What are the organization’s strategic business

objectives and how can we link them directly to our communication objectives?

 Audience Analysis. Who are we most concerned about reaching? Why do we want

to communicate with them? What outcome do we hope for when we reach them?

 Message Construction. What do we want to say to each of these audiences? Will

our messages differ from one set of stakeholders to another? How simple or

complex should the message be?

 Medium Selection. How should we try to reach these stakeholders? Should we

consider electronic means? How about print means? Should we telemediate our

message through the press? Should we try to communicate directly with one or

more of the stakeholder groups?

 Measurement of Outcomes. How will we know if we have succeeded? What criteria

should we use to determine success? If we’re not successful, what should we

consider changing first: medium, message, audience, or objectives?

Last 15 Minutes of Class

Distribute Part B of the case. Allow students time to read and digest the material.

Conclude the discussion. Use the Questions for Discussion relating to Part B to aid

student discussion. Would they have done anything different? Did they believe Texaco’s

course of action was effective?

The key to this case, as with nearly all other management communication cases, is to let

students speak freely, but guide their comments toward the issues facing the

organization. A Timeline of Events and a list of suggested Questions for Discussion

follow for your teaching reference.

Timeline of Events

Part A

1902 Texaco is founded.

1980s Texaco initiates a decade of staff layoffs in order to stay competitive within the

oil industry.

1994 Employment lawsuit is filed against Texaco; class-action of behalf of 1,500

employees. This lawsuit was still pending at the time the racial discrimination

fiasco hit the press in 1996.