Harvard Case - Evergreen Enhancement
"Evergreen Enhancement" Harvard business case study is written by Jared Harris, Jenny Mead. It deals with the challenges in the field of Business Ethics. The case study is 8 page(s) long and it was first published on : Aug 30, 2012
At Fern Fort University, we recommend that Evergreen Enhancement (EE) adopt a comprehensive strategy to address its ethical and sustainability challenges. This strategy should prioritize transparency, ethical leadership, and stakeholder engagement to restore its reputation, rebuild trust, and ensure its long-term viability. The strategy should involve a combination of immediate actions to address the current crisis and a long-term commitment to embedding ethical and sustainable practices throughout the organization.
2. Background
Evergreen Enhancement, a family-owned business specializing in landscaping and environmental services, faces a significant crisis. The company's founder, David Evergreen, has been accused of engaging in unethical practices, including bribery and environmental violations. This has damaged EE's reputation, leading to a loss of clients, employee morale, and investor confidence. The case highlights the challenges of family businesses, corporate governance, and ethical decision-making in the face of external pressures.
The main protagonists are:
- David Evergreen: The founder and CEO of EE, facing accusations of unethical behavior.
- Sarah Evergreen: David's daughter and the company's Chief Operating Officer, struggling to maintain the company's reputation and navigate the crisis.
- The Board of Directors: Responsible for overseeing the company's operations and ensuring ethical conduct, but lacking in experience and facing pressure from David.
- Employees: Concerned about the company's future and their own job security, with some feeling disillusioned by the allegations.
- Customers: Worried about the company's ethical practices and considering switching to competitors.
3. Analysis of the Case Study
This case study can be analyzed using the Stakeholder Theory framework. This framework emphasizes the importance of considering the interests of all stakeholders, including employees, customers, suppliers, investors, and the community. EE's current crisis stems from a failure to prioritize the interests of all stakeholders, particularly in its pursuit of short-term profits.
Key Issues:
- Ethical Leadership: David Evergreen's alleged actions demonstrate a lack of ethical leadership and a disregard for the company's values.
- Corporate Governance: The board of directors appears to be ineffective in holding David accountable and ensuring ethical practices.
- Transparency: EE's lack of transparency regarding its operations and decision-making contributed to the crisis.
- Sustainability: The company's environmental violations demonstrate a lack of commitment to environmental sustainability.
- Stakeholder Relations: The crisis has damaged EE's relationships with customers, employees, and the community.
4. Recommendations
Immediate Actions:
- Conduct a Thorough Investigation: EE should immediately commission an independent investigation to thoroughly examine the allegations against David Evergreen. This investigation should be transparent and involve external experts with expertise in business law and ethics.
- Suspend David Evergreen: Pending the results of the investigation, David Evergreen should be suspended from his position as CEO. This will demonstrate the company's commitment to accountability and ethical conduct.
- Appoint an Interim CEO: A highly respected and experienced individual with a strong ethical background should be appointed as interim CEO to lead the company through the crisis.
- Communicate Openly and Honestly: EE should communicate openly and honestly with all stakeholders about the investigation and the steps being taken to address the crisis. This communication should be clear, concise, and empathetic.
- Offer Apologies and Compensation: EE should apologize to affected stakeholders, including customers and employees, and offer appropriate compensation for any damages caused by the company's unethical practices.
Long-Term Strategies:
- Develop a Strong Code of Conduct: EE should develop a comprehensive code of conduct that clearly outlines ethical expectations for all employees, including conflict of interest policies, whistleblowing procedures, and data privacy guidelines.
- Implement Robust Corporate Governance Practices: EE should strengthen its corporate governance practices by establishing an independent board of directors with expertise in ethics, sustainability, and risk management. The board should be responsible for overseeing the company's operations, ensuring compliance with regulations, and holding management accountable.
- Embrace Sustainability: EE should commit to environmental sustainability by implementing green business practices, reducing its environmental footprint, and investing in renewable energy sources. This commitment should be communicated to stakeholders through ethical marketing and corporate philanthropy.
- Promote Diversity and Inclusion: EE should prioritize diversity and inclusion in its workforce and leadership. This will foster a more ethical and innovative culture and improve stakeholder relations.
- Invest in Leadership Development: EE should invest in leadership development programs to ensure that all employees, especially future leaders, are equipped with the knowledge and skills to make ethical decisions and lead with integrity.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The recommendations are aligned with EE's core competencies in landscaping and environmental services. They also reinforce the company's mission of providing high-quality services while respecting the environment and its stakeholders.
- External Customers and Internal Clients: The recommendations address the concerns of both external customers and internal employees by prioritizing transparency, accountability, and ethical conduct.
- Competitors: The recommendations aim to position EE as a leader in ethical and sustainable business practices, differentiating the company from competitors and attracting customers who value these principles.
- Attractiveness: The recommendations are expected to improve EE's long-term profitability by restoring its reputation, attracting new customers, and retaining employees.
6. Conclusion
By implementing these recommendations, Evergreen Enhancement can overcome its current crisis and emerge as a more ethical and sustainable company. The company's commitment to transparency, ethical leadership, and stakeholder engagement will rebuild trust, attract new customers, and ensure its long-term viability.
7. Discussion
Alternative Options:
- Ignoring the crisis: This option would likely lead to further damage to EE's reputation and ultimately result in the company's failure.
- Covering up the allegations: This option would be unethical and could lead to legal consequences.
- Focusing solely on legal compliance: While important, this approach would not address the underlying ethical issues and would not restore trust with stakeholders.
Risks and Key Assumptions:
- The investigation may reveal additional unethical practices: This could further damage EE's reputation and require additional corrective actions.
- Stakeholders may not be satisfied with the company's response: This could lead to continued negative publicity and boycotts.
- The company may not be able to attract qualified leaders: This could hinder the implementation of the recommended strategies.
Options Grid:
| Option | Advantages | Disadvantages | Risks |
|---|---|---|---|
| Comprehensive Strategy | Restores reputation, rebuilds trust, ensures long-term viability | Requires significant effort and resources | Investigation may reveal further issues, stakeholders may not be satisfied |
| Ignoring the crisis | No immediate costs | Further damage to reputation, potential failure | High risk of reputational damage and financial loss |
| Covering up the allegations | Short-term cost savings | Unethical, legal consequences | High risk of legal penalties and reputational damage |
| Focusing solely on legal compliance | Minimizes legal risk | Does not address ethical issues, fails to restore trust | Limited impact on reputation and stakeholder relations |
8. Next Steps
- Within 1 week: Commission an independent investigation and appoint an interim CEO.
- Within 2 weeks: Communicate openly and honestly with stakeholders about the investigation and the steps being taken to address the crisis.
- Within 1 month: Develop a comprehensive code of conduct and implement a robust corporate governance framework.
- Within 3 months: Begin implementing sustainability initiatives and invest in leadership development programs.
- Within 6 months: Evaluate the effectiveness of the implemented strategies and make adjustments as needed.
By taking these steps, Evergreen Enhancement can demonstrate its commitment to ethical and sustainable business practices and emerge from this crisis as a stronger and more responsible company.
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Case Description
"Richard Alpert, senior partner at Evergreen Investments, must decide which of his two best employees to promote to the position of managing VP. He had initially preferred Charlie Pace over Daniel Faraday, but that decision had become less clear-cut when Alpert inadvertently overheard an office conversation and learned that Pace was taking Adderall, a stimulant primarily prescribed for people suffering from attention deficit/hyperactivity disorder (ADHD). Pace did not have ADHD and apparently obtained the medication by deceiving a physician. Alpert is faced with a number of questions, including whether it was fair to Faraday-or any other high-performing employee-to be passed over for promotion in favor of someone who illicitly boosted his performance with a substance he did not medically need. "
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