Team Case #2: Culture Change at Texaco
By “The Moral Matadors” (team #6)
Michael Breler | Chris Hollis | Matt Hoover | Laura Beth Martin | Chanda Pathak | Scott Stover
PIPSCo CASE WRITE-UP
• Texaco was sued for discriminating against African Americans • CEO Peter Bijur settled the case for $175 million ($140 to damages, $35 to independent task force) • The stock to fall $3 per share
• Blatant racist language and behavior on the part of Texaco employees and managers • Documented lower pay for minority employees (in some cases lower than the minimum for the job category) • Racist comments made by Texaco executives were captured on audio tape and leaked to the public • Senior financial analyst Bari Ellen Roberts wrote a book detailing the humiliating experiences faced by herself and many minority employees, as well as how Texaco grievance claims by minorities • Low crude oil and natural gas prices put the company in financial hardship • Due to low revenues and earnings 8,500 employees were laid off • The Peter Bijur still launched a complete cultural change effort; he made it clear he would not tolerate disrespect those who didn’t go along with that culture change would be dismissed • Several initiatives were started by Bijur in order to promote diversity, including: speaking to outside groups about diversity, hiring African-Americans to key positions within the company, designing new recruiting systems targeting minority candidates, and setting up scholarship and internships targeted towards minorities • In 1999 44 percent of new hires and 22 percent of promotions went to minorities • The company spent over a billion dollars with minority and women owned vendors in 1997 and 1998, exceeding a goal set by the firm in 1996 • Although the overall percentage of women and minority employees increased slightly, the percentage of new hires and promotions in both categories declined,...
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