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4. Should a company allow retired employees to reapply for a job with the company,
especially if those employees retired under an early incentive plan? Does that seem fair
for employees to accept the benefits of the package and then apply for another job with
the same company?
Stakeholder Perspectives Include:
AT&T Management
AT&T Employees (both current and retired)
U.S. Equal Employment Opportunity Commission and other anti-discrimination
agencies/ groups
Investors
Possible Solutions to the Problem
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:
- AT&T’s policy
- How anti-discrimination laws can affect a company’s internal policies and procedures
- How having a workforce comprised of employees of various ages can foster a company’s
success and growth
- How age discrimination is a serious issue in the workplace
First 30 Minutes of Class
Spend the first 10 minutes of class reviewing the main facts of the case including a brief
description of the history of AT&T, the Equal Employment Opportunity Commission, the Age
Discrimination in Employment Act, and the suit between AT&T and EEOC.
During the next 20 minutes, students should identify and discuss at least the following topics.
Remind students to consider both sides of the issue.
- In what ways AT&T’s policy violated the ADEA
- Reasoning behind AT&T’s policy
- The EEOC’s efforts to enforce the ADEA
- How a diverse workforce, including one comprised of employees of various ages, can
help strengthen a company and lead to competitive advantage
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Summarize Students’ Responses
Ask students whether age discrimination is prevalent in today’s workplace. Also ask students
1877: AT&T is founded
1964: The Civil Rights Act of 1964 passes
1965: U.S. Equal Employment Opportunity Commission is formed
1967: Age Discrimination in Employment Act passes
2000s: AT&T offers early retirement plan
Aug 2009: EEOC files a suit against AT&T for age discrimination
2011: EEOC settles its case with AT&T
Discussion Questions
2. From your personal knowledge and experience, is age discrimination prevalent in
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ASLEEP AT THE WHEEL:
FORD MOTOR COMPANY’S EXCLUSION OF THE OLDER WORKER
This teaching note was prepared by Dr. Harris Sondak (David Eccles School of Business;
University of Utah).
Purpose of the Case Study
1. To help students understand the complexities of change management.
2. To explain how diversity management has many dimensions, some of which may
conflict.
3. To give students insight into how corporate strategies influence and are influenced by
HR practices.
4. To provide students with an understanding of age discrimination and its legal context.
Identifying the Business Problem
Ford Motor Company had a long-standing reputation as an employer that had provided
a diverse workforce with good jobs. However, in attempting to increase performance at
Ford, the CEO Jacques Nasser aggressively moved to increase diversity further. The
ways in which Nasser implemented these efforts led to age discrimination lawsuits and
expensive settlement costs. This history raises the important issue of how firms can
increase their performance and diversify their workforce while avoiding complaints by
existing, senior employees who, while perhaps not very diverse, are, simply as a matter
of their age, members of a protected class.
Forecasting the Most Desirable Outcome
Ford identifies strategies that will promote diverse employees into management
positions, including senior management, while recognizing the important contributions
all employees – including those with years of seniority – can make to the firm’s success.
Identifying the Critical Issues
1. Ford, like other U.S. manufacturing companies, is facing an increasingly competitive
global market.
2. Ford must have processes that are effective in recognizing and encouraging high
performance from its employees.
3. Corporate restructuring may be needed to remain competitive; these efforts must be
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4. There are many dimensions of diversity; firms must develop integrative strategies that
promote them all and create a unified workforce rather than sacrifice some to others and
create conflict among groups.
Stakeholder Perspectives Include:
Shareholders. Shareholders had seen erosion in their company’s competitive position.
They approved of Nasser’s goals of cutting costs and increasing efficiency in the quest to
further shareholders’ returns.
Minority employees. Nasser wanted to increase minority representation at Ford, even
though Ford had already achieved a positive reputation in this regard.
Older employees. If minority representation was to increase, without an increase in the size
of the overall workforce, some groups would be less represented than before. The new
evaluation system that Nasser developed was perceived to hurt older employees, who
were less diverse than the younger work force.
Plaintiffs in the discrimination lawsuits. The PMP requires some employees to receive
evaluations that could lead to their dismissal. Further, upper management seems to have
been biased against older and less diverse employees, actively desiring to replace them
with younger and more diverse workers. Advocacy groups (such as the AARP) see their
role as supporting legislation through legal action on behalf of their constituencies.
Possible Solutions to the Problem
1. Given the replacement of Nasser by William Clay Ford, Jr., the new CEO must move to
2. The new evaluation system should encourage cooperation rather than division among
6. Managers should be educated about age discrimination laws and how to combat their
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Explaining How to Communicate the Solution
The company should indicate to both internal and external audiences how its new
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:
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The intent and language of the ADEA.
Summarize Students’ Responses
Ask students what kind of evaluation and promotion system they would like to use to
cooperation as well.
Timeline of Events
1903 Ford Motor Company founded by Henry Ford.
1916 Ford employs people from 62 countries around the world, and 900 people with
disabilities.
1967 Age Discrimination in Employment Act signed into law.
1968 Jacques Nasser joins Ford Motor Company (Australia) as a financial analyst.
1999 Jacques Nasser named CEO of Ford Motor Company.
2000 Ford Motor Company named by Fortune as one of the best companies for minorities;
Nasser initiates new diversity efforts.
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2001 Nasser replaced as CEO by William Clay Ford, Jr.
2001 Ford Motor Company sued for age discrimination; settles for $10.5MM.
2003 Ford Motor Company sued again for age discrimination.
2004 Ford Motor Company ranked 3rd in the U.S. for diversity by DiversityInc.
Discussion Questions
1. What mistakes did Jacques Nasser make in developing his plan to diversify Ford’s
workforce?
2. How can Ford restore its good reputation for promoting diversity?
3. What were the problems with Ford’s PMP evaluation system?
4. What changes should be made in creating a new evaluation system?
5. How did Ford appear to violate the ADEA?
6. What should management do when promoting one dimension of diversity seems to
require diminishing another?
7. How should businesses adapt to the aging of the U.S. workforce?
8. How much does it matter that top management be as diverse as the workforce?
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PURITY OF SPIRIT: TOM’S OF MAINE
This teaching note was prepared by Dr. Harris Sondak (David Eccles School of Business;
University of Utah).
Purpose of the Case Study
1. To illustrate how personal spiritual values can both support and come into conflict with
profit-maximizing goals.
2. To give students insight into how corporate strategies influence and are influenced by
personal values.
3. To help students understand the complexities of aligning corporate strategies, HR
policies, and business ethics.
Identifying the Business Problem
Tom’s of Maine was founded to promote an environmental ethic of sustainability.
However, in growing the company, founder and CEO Tom Chappell found himself
pressured to compromise his personal ethics and vision for his company for the sake of
increased sales and profits. These pressures made Chappell reconsider what was
important to him personally and led to his spiritual development and pursuit of a degree
in divinity. Chappell returned to his company re-inspired to further its original mission
and came to see the business as a personal ministry; he subsequently implemented
numerous policies consistent with this view. Employees must share Chappell’s vision for
his company if they are to succeed at Tom’s of Maine, though they do not necessarily all
share Chappell’s spiritual commitments. How can companies simultaneously maintain
the ethics of their founders, grow, and be welcoming to a diverse group of members?
Forecasting the Most Desirable Outcome
Tom’s of Maine identifies successful competitive strategies that will be consistent with
the spiritual ethics of the founders of the company yet are welcoming to diverse
employees.
Identifying the Critical Issues
1. Tom’s of Maine, like other U.S. companies, is inspired by the spiritual and ethical values
of its founders.
2. Tom’s operates successfully in a highly competitive market despite higher costs from its
use of natural ingredients and its personnel policies.
3. Tom’s of Maine had to negotiate creative agreements with regulatory agencies so that it
could develop and market its products without compromising important ethical values.
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4. One important value for Tom’s of Maine is hiring a diverse workforce; this goal may
conflict with furthering the spiritual values of top management because those values may
not be held by the various employees.
Stakeholder Perspectives Include:
Founders and Owners. Tom and Kate Chappell want Tom’s of Maine to grow and prosper,
and they want to reap the rewards of many years of investment and hard work. However,
they have insisted that their company’s growth not compromise their spiritual values
and that any potential buyer of their business continue their vision for the company; this
insistence has limited their opportunities.
Employees. Employees have many opportunities as the result of Tom Chappell’s spiritual
values, though they may face some hurdles as well. Employees appreciate the chance to
spend work time volunteering to benefit their preferred non-profit organizations. They
also enjoy a generous benefits package. Employees are encouraged to contribute their
ideas and to commit to the values of the organization though there is a clear hierarchy of
decision making at Tom’s of Maine. To increase the diversity of the staff, current
employees do not automatically have preference for open jobs, even if they have served
loyally and effectively for years.
Consumers. Many consumers are drawn to the natural products, full product information
disclosure policies, and spiritual and ethical values of Tom’s of Maine. Higher
production costs, however, translate into higher prices for consumers so Tom’s of Maine
faces challenges in expanding beyond a niche market. Other companies, including the
major competitors in the market for personal care products, have marketed their own
lines of natural or healthy products, increasing the competitive pressure on Tom’s.
Suppliers. Tom’s of Maine expects its suppliers to uphold many of its values. When they
do not, sometimes Tom’s takes matters into its own hands as when it developed its own
organic farm to supply the botanicals needed for their products. Suppliers must agree not
to test any ingredients on animals.
General Public. Because Tom’s of Maine would not test its products on animals, new FDA
and ADA testing procedures had to be negotiated. These new procedures benefit
everyone who is concerned about animal welfare issues.
Possible Solutions to the Problem
1. Tom’s of Maine is not and will not be the low-cost producer; Tom’s must focus on and
2. Given the highly competitive nature of the personal care products business, and the size
and power of the rivals of Tom’s of Maine (e.g., Procter and Gamble), Tom’s must be
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3. As spirituality and ethics become more widely and openly expressed in business, Tom’s
4. All workers must be assured that their efforts are fully appreciated, whether or not they
5. Just as Tom and Kate Chappell were willing to abstain from selling the company because
potential buyers could not meet their ethical and spiritual demands, Tom’s of Maine
must recognize that growth and profit are subordinate to its mission and beliefs. Insofar
as the company is not publicly traded, making this trade-off is up to the owners.
similar to non-profit organizations – its mission drives its strategy, and its mission is not
just making money.
Teaching the Case
1 Week Prior
Distribute the case at least one lesson prior to when you will discuss it in class. Tell the
