Garcia, Ralph Gio P.

GOVERNANCE, BUSINESS ETHICS, RISK MANAGEMENT AND INTERNAL CONTROL

Mini-Case 2: Hewlett-Packard: Pretexting

Analysis of the well-known HP scandal will be the objective of

this work. HP, in a situation of finding the source that leaks
boardroom’s information to the media, was questioned by the state
and federal authorities by launching pretexting through data
brokers to obtain cellphone records and private information of
its Board of Directors, employees and journalists without their
knowledge and consent. The analysis will be examined the HP
scandal logically and rationally whether that the acts of HP
towards finding the leak were ethically valued and integrated,
especially by Patricia Dunn who is the Chairwoman and who takes
aggressive reaction at the time of the incident.
In any degree of content that the story of CNET may provide
towards the leak of information, it is unethical how the HP board
faced the issue. Whatever the case maybe, there will be ways to
find information or conduct investigation in ethical manner.
The culture of HP way must be demolished. Providing better
internal control system should be implemented by promoting
ethical standards towards the rights of the officers or employees
and the exercise of powers of the executive officers or board of
directors.
The standards that they are talking about is likely that they
have their own regulations and rules that does not coincide with
the laws of the state and federal authorities. The aggressive
actions towards obtaining information through pretexting doesn’t
make the corporation ethically integrated, instead it makes them
look like an immature one that will obtain all the things that
they want even though the process will be immoral and illegal.
The approval of the HP’s legal advisor beforehand towards the
actions of Dunn and her board doesn’t excuse them from the
responsibility of the case. The legal advisors of HP are not the
law itself. They are just intellects of the law who will provide
someone legal advice whether your actions are coordinated with
the law. Ethics and law is different from one another and it may
be legally approved but in some cases it doesn’t promote ethics.
That’s why actions must not be based only if it’s right with the
law but also if it’s right as a human.
Based on further studies with this case, there’s no law at the
time of the incident. But, as soon as the HP scandal breaks the
whole corporate industry, the state of California decided to
create a law that will protect individuals from pretexting or
other forms of obtaining the private information of individuals.
An individual will always be responsible on things that he
initiated to commit. There’s no excuses even you are a Chairwoman
of a company. Position doesn’t matter when you’ll envision the
society as community or treating people as human.
The HP way based on research provides that HP way is a form of
corporate democracy where employees have voice in decision
making, their opinions are valued, their careers are nurtured,
and core values such as teamwork and integrity are instilled. The
pretexting doesn’t emphasize any principles that the HP way
provides.
First, employees have voice in decision making and their
opinions are valued. The actions of Dunn by obtaining information
through pretexting is a decision which she hides from the other
board members. The voice is limited to herself in the HP scandal.
Lastly, the careers will not be nurtured, teamwork will not be
presented, and integrity will not be promoted if Dunn will
continue on doing things that she thinks is the HP way, she only
makes the HP way an excuse on creating situational pressure
towards the company that is reflected in her actions.
The dismissal of Patricia Dunn in light of her indictment is
the right thing to do. The corporation must change the culture by
eliminating the one who makes the company suffer from distress.
Creating ethical culture will be the best for the HP corporation
at that time.
Also, the dismissal of Patricia Dunn gives light to the new
regulation towards the obtainment of private information. It is
the way to promote ethics in different corporations that still
integrate the toxic culture where Dunn was involved.
Mark Hurd is successful as the CEO and Chairman of the HP
during his time. The sales were better than before and it also
topped the sales of laptops in his term. In this case, I think
Hurd restored the reputation of HP by providing high quality
products to the people. It means that he will create a new
environment where ethics will be integrated and still provide top
quality products and services.
In the verge of summing up this analysis, I’ll likely to
provide that; First, obtaining suspects from leakage of
information must practice ethics. Second, to avoid such scandal
of HP pretexting issue, a company must have strong internal
control program. Third, in building strong internal control
program, a corporation must abide the law authorities in
coordinating the internal control system. Fourth, for a
corporation to have strong foundation, it must not hire legal
advisors who doesn’t practice ethically, example of legal
advisors to avoid is the HP’s legal advisors who approved the
immoral acts of Patricia Dunn. Fifth, the executive officers must
know how to act morally whatever position that they have. Sixth,
the founding principles of a company such as the HP way must not
be the reference to create an immoral act and it is important to
still practice the inspiring principles morally and ethically.
Seventh, corporation officers or board of directors should not be
afraid to stepped up when the company is in the crisis like the
HP pretexting scandal where the corporation decided to dismiss
Patricia Dunn for committing immoral acts. Lastly, as a new
chairman or CEO of a company, one must not be afraid to put
ethics into the culture of corporation like what Mark Hurd have
done for HP to overcome the hurdle of bringing back the
reputation of the HP way. As what Martin Luther King Jr. said,
“The time is always right to do what is right.”