Business Ethics, 8e Jennings
those who were dissenters. Or he threatened the board when members asked questions about his
strategy. His career and track record led him to believe that he was invincible and he lost touch with
CASE 2.8 – ON SAYING ONE THING AND DOING ANOTHER: PUBLIC
PERCEPTION AND DECEPTION COVERING FOR THE CEO
Apple’s position is that health is a private matter. Analysts’ position is that if Jobs leaves then Apple’s
stock drops 25%. The SEC’s position is that companies must disclose material information. And so we
swirl. “None of your business,” is not the stuff that puts rumors to rest. Maybe a firm, “You can’t handle the
truth,” would be less controversial. Or maybe Apple needs to escape the either/or conundrum. The
either/or conundrum arises when we have two good values in conflicts. Here, one value is telling the truth
about the health of a CEO. Another good value is preserving shareholder value. Apple assumes that by
keeping mum about the health issue that it can walk a fine line and honor both conflicting values. But
“mumness” can be deceptive. And Apple has been blinded by assumptions as well as by its failure to think
along the lines of succession planning. If all Apple now has is tied directly to Jobs, the company has not
done its work in terms of creating a culture founded on the Jobs’ principles. Jobs’ departure, for whatever
reason, will be a death knell if all Apple has is Jobs. Perhaps, though, Apple could use a little
self-confidence. Perhaps it could also begin communicating that part of the story to shareholders and the
market, to wit – We really can sally forth without Jobs. Maybe Jobs could even lend his voice to
acknowledge that Apple can and will go on, post-Jobs.
Rather than mucking about in the “health is a private matter and not material” arguments about its
close-to-the-vest approach, Apple might try the release of information that is not private but is material.
That information would be that the company has a succession plan in place, that its culture is strong, and
that it will go on to preserve the Jobs’ legacy. The stock drop assumption exists not because Jobs would
leave a void but, rather, because investors, shareholders, and analysts believe there is no “Carry on!” in
place. Dispelling that rumor is the heart of the issue, not the “to disclose or not disclose” whether Jobs is
ill. When we fall into the either/or conundrum, it is almost always because we have not addressed an
underlying problem. The either/or conundrum is the symptom of being caught between a rock and a hard
place, or, trying to preserve two good values by breaching another.
Answers and Key Discussion Items
1. In the cases listed, the reasons given for departure gave a false impression because the conduct of
the departing officers after the departure belied the reason. The family reason does eliminate
questions about what was really happening at the company and may preserve the value of the stock.
However, have the students think through the consequences for the company, if only from the
perspective that the company is not really facing up to the issues it faces. Also, there is an impact on
the culture when the company makes statements employees know not to be true about the reasons
for the executive’s departure. The reasons save face for the executive and the company. The share
price does not drop if there is a “soft” reason as opposed to weak management or perhaps some
evolving financial concerns and issues.
Yes, the family-time statements do preserve dignity, but there’s that emotion getting in the way of
what really is a clear test: Is this information true? Is it misleading? Why are you using a different
reason? Why are you using a partial explanation? There is deception or false impression being used
to preserve dignity – the classic either/or conundrum is at work here.
2. The legal issue here is whether the statement is intentionally false. If the executive agrees to the
statement, it would be difficult to establish fraud because there was, at the time, at least some truth to
the statement. However, in the classic ethical sense, shareholders and markets are misled about the
true reasons as well as the true condition of the management structure and success at the company.
However, SEC rules do not specify instructions on content of press releases. The key portion of the
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