BRI 1001

Topics: Ethics, Business ethics, United Technologies Corporation Pages: 14 (4592 words) Published: April 20, 2015
UVA-BRI-1001

UNITED TECHNOLOGIES CORPORATION:
RUNNING A GLOBAL ETHICS AND COMPLIANCE PROGRAM

In July 2003, Pat Gnazzo, vice president of Business Practices for United Technologies Corporation (UTC), sat at his desk in the company’s Hartford, Connecticut, headquarters considering the challenge of integrating 46,000 new employees into UTC’s global ethics and compliance program from the recently acquired Chubb plc, a United Kingdom-based leader in security and fire protection services. Although Gnazzo had faced many difficult issues since he had taken over business practices programs for UTC in 1995, this challenge was unique. Simultaneously integrating this volume of employees—who were situated in a variety of different cultures across the globe—would be a monumental task, especially since Chubb’s ethics and compliance priorities were not on the level of UTC’s. Gnazzo wondered where he should start.

History of UTC and Business Units1
United Technologies Corporation was a $31 billion global corporation made up of seven business units and a stand-alone research center, which supported research for all divisions. The business unit divisions were Carrier Corporation (climate control systems), Hamilton Sundstrand (airplane systems), Otis Elevator, Pratt & Whitney (airplane engines), Sikorsky (helicopters), UTC Power (hydrogen fuel cells), and the recently acquired Chubb (security and fire protection services). A global conglomerate with a total of 205,700 employees after the Chubb acquisition (138,000 based outside of the United States), UTC had over 4,000 locations in approximately 62 countries and did business in more than 180 countries. In 2002, 55 percent of UTC’s total revenues came from outside the United States, and its net income was $2.2 billion with assets totaling $29.1 billion. In March 2003, UTC ranked 49th on the Fortune 500 list of companies. Many of UTC’s long-standing business units were originally formed by business pioneers, whose names were still associated with the products. According to George David, chief executive officer of UTC, “We invented every business we are in—and in a bunch of cases 1

The information in this section was gathered from the United Technologies Corporation Website http://www.utc.com.

This case was prepared by Lisa Stewart, Program Manager for the Business Roundtable Institute for Corporate Ethics under the supervision of R. Edward Freeman, Elis and Signe Olsson Professor of Business Administration/ Director of the Olsson Center/Academic Advisor of the Business Roundtable Institute for Corporate Ethics, and Jeanne Liedtka, Johnson & Higgins Associate Professor of Business Administration/Executive Director of the Batten Institute. Copyright © 2005 by the Business Roundtable Institute for Corporate Ethics (www.corporateethics.org). Reproduction and use for direct educational purposes permitted. All other rights reserved.

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UVA-BRI-1001

the name of the [business] is the name of the person who did the invention.”2 Elisha Otis founded Otis Elevator in 1853; Willis H. Carrier invented air conditioning in 1902 and started Carrier Engineering in 1915; in 1920, Hamilton Aero Manufacturing was founded by Thomas Hamilton; Sundstrand Machine Tool Company by David Sundstrand in 1929; Igor Sikorsky founded Sikorsky Aero Engineering in 1923; and Pratt & Whitney Aircraft was incorporated in 1925. Chubb, a leader in security and fire protection services and UTC’s newly acquired company, originated in 1818 in the United Kingdom when Charles and Jeremiah Chubb patented their prize-winning detector lock.

UTC had a long and complex history. United Aircraft and Transport was formed in 1929, when Boeing Airline & Transport joined forces with Hamilton, Sikorsky, Pratt & Whitney, Chance Vought, and Standard Steel Propeller. That same year, the Research Center, the corporation’s central research laboratory, was established in Connecticut. Objections raised by the U.S. government in...
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