Case 8.17Question 3 Make a list of all of the consequences Coke experienced as a result of the Richmond rigging. “The initial decision was flawed, and the rest of the problems resulted from that flawed decision,” was an observation of an industry expert on the Richmond marketing test. What did the expert mean with this observation?Question 5 What lessons should companies learn from the Whitley firing and lawsuit? What changes do you think Coke has made in its culture to comply with the SEC settlement requirements? Are there some lessons and elements for a credo in the conduct of individuals in this case?Case 8.18Question 2 Many employees who raised concerns were terminated or otherwise retaliated against. If you were in their position, what would you have done?Question 3 What should companies do to encourage employees to express concerns about sales tactics?Case 7.23Question 2 Suppose that you were a partner and a member of either the admissions committee or the policy board. What objections, if any, would you have made to any of the comments by the partners? What would have made it difficult for you to object? How might your being a female partner in that position have made objection more difficult?Question 5 Ms. Hopkins listed three factors to help companies avoid what happened to her; (1) clear direction from the top of the enterprise, (2) diversity in management, and (3) specificity in evaluation criteria. Give examples of how a company could implement these factors.106
Case 7.23
Ann Hopkins and Price Waterhouse
Ann Hopkins was a senior manager in the Management Advisory Services division of the
more appealing lady partner candidate.”104 In order for Hopkins to improve her chances
Price Waterhouse Office of Government Services (OGS) in Washington, DC. After earning for partnership, Thomas Beyer, a partner who supervised Hopkins at OGS, suggested that
undergraduate and graduate degrees in mathematics, she taught mathematics at her alma she “walk more femininely, talk more femininely
, dress more femininely, wear make-up,
mater, Hollins College, and worked for IBM, NASA, Touche Ross, and American Manage-
have her hair styled, and wear jewelry.”105 Ms. Hopkins said she could not apply makeup
ment Systems before beginning her career with Price Waterhouse in 1977.91 She became because that would require removing her trifocals and she would not be able to see. Also,
the firm’s specialist in large-scale computer system design and operations for the federal her allergy to cosmetics made it difficult for her to find appropriate makeup. Mr. Beyer
government. Although salaries in the accounting profession are not published, estimates also suggested that she should not carry a briefcase, should stop smoking, and should not
put her salary as a senior manager at about $65,000.
drink beer at luncheon meetings. Dr. Susan Fiske, a social psychologist and associate pro-
At that time, Price Waterhouse was known as one of the “Big 8” or one of the top public fessor of psychology at Carnegie-Mellon University who would testify for Hopkins in her
accounting firms in the United States. 92 A senior manager became a candidate for partner-
suit against Price Waterhouse, reviewed the Price Waterhouse selection process and con-
ship when the partners in her office submitted her name for partnership status. In August cluded that it was likely influenced by sex stereotyping. Dr. Fiske indicated that some of
1982, at the end of a nomination process that began in June, the partners in Hopkins’s the partners’ comments were gender biased, and even those comments that were gender
office proposed her as a candidate for partner for the 1983 class of partners. Of the 88 can-
neutral were intensely critical and made by partners who barely knew Hopkins. Dr. Fiske
didates who were submitted for consideration, Hopkins was the only woman. At that time,
concluded that the subjectivity of the evaluations and their sharply critical nature were
Price Waterhouse had 662 partners, 7 of whom were women.” Hopkins was, however, a
probably the result of sex stereotyping.’
stellar performer and was often called a “rainmaker.” She was responsible for bringing to
However, there were numerous comments such as the following that voiced concerns
Price Waterhouse a two-year, $25 million contract with the U.S. Department of State, the
about nongender issues:
largest contract ever obtained by the firm. 94 Being a partner would not only bring Hopkins In July/Aug 82 Ann assisted the St. Louis MAS practice in preparing an extensive proposal to the Farmers Home
status, but her earnings would increase substantially. Estimates of the increase in salary
Admin (the proposal inc 2800 pgs for $3.1 mil in fees/expenses & 65,000 hrs of work). The proposal was com-
were that she would earn almost double, or $125,000 annually, on average (1980 figures).
pleted over a 4 wk period with approx 2000 plus staff/ptr hrs required based on my participation in the proposal
effort & sub discussions with St. L MAS staff involved. Ann’s mgmt style of using “trial & error techniques” (ie,
The partner process was a collaborative one. All of the firm’s partners were invited to sending staff assigned off to prepare portions of the proposal with little or no guidance from her & then her
submit written comments regarding each candidate, on either “long” or “short” evaluation
subsequent rejection of the products developed) caused a complete alienation of the staff towards Ann & a fear
forms. Partners chose a form according to their exposure to the candidate. All partners
that they would have to work with Ann if we won the project. In addition, Ann’s manner of dealing with our staff
& with the Houston sr consultant on the BIA project, raises questions in my mind about her ability to develop &
were invited to submit comments, but not every partner did so. Of the 32 partners who motivate our staff as a ptr. (No) [indicates partner’s vote]107
submitted comments on Hopkins, one stated that “none of the other partnership candi-
I worked with Ann in the early stages of the 1st State Whelan Dept proposal. I found her to be a) singularly dedi-
dates at Price Waterhouse that year [has) a comparable record in terms of successfully cated, b) rather unpleasant. I wonder whether her 4 yrs with us have really demonstrated ptr qualities or whether
procuring major contracts for the partnership.”95 In addition, Hopkins’ billable hours were we have simply taken advantage of “workaholic” tendencies. Note that she has held 6 jobs in the last 15 yrs, all
impressive, with 2,442 in 1982 and 2,507 in 1981, amounts that none of the other partner-
with outstanding companies. I’m also troubled about her being (having been) married to a ptr of a serious compet-
ship candidates’ billable hours even approached.
itor.108 (Insuff—but favor hold, at a minimum)
After reviewing the comments, the firm’s Admissions Committee made recommenda- Ann’s exposure to me was on the Farmers Home Admin Blythe proposal. Despite many negative comments from
tions about the partnership candidates to the Price Waterhouse Policy Board. The recom-
other people involved I think she did a great job and turned out a first class proposal. Great intellectual capacity
mendations consisted of accepting the candidate, denying the promotion, or putting the
but very abrasive in her dealings with staff. I suggest we hold, counsel her and if she makes progress with her
interpersonal skills, then admit next year. (Hold)109
application on hold. The Policy Board then decided whether to submit the candidate to a
vote, reject the candidate, or hold the candidacy. There were no limits on the number of Although Hopkins and 19 others were put on hold for the following year, her future
persons to whom partnership could be awarded and no guidelines for evaluating positive looked dim. Later, two partners withdrew their support for Hopkins, and she was informed
and negative comments about candidates. Price Waterhouse offered 47 partnerships to the that she would not be reconsidered the following year. Hopkins, who maintains that she
88 candidates in the 1983 round; another 27 were denied partnerships; and 20, including was told after the second nomination cycle that she would never be a partner, then resigned
Ms. Hopkins, were put on hold. Ms. Hopkins had received more “no” votes than any other and filed a discrimination complaint with the Equal Employment Opportunity Commis-
candidate for partnership, with most of those votes coming from members of the partner- sion (EEOC). 110
ship committee outside the firm’s government services unit.
The EEOC did not find a violation of Title VII of the Civil Rights Act of 1964 (which
The comments on Hopkins were extensive and telling. Thirteen of the thirty-two part- prohibits discrimination in employment practices) because of the following: (1) Hopkins
ners who submitted comments on Hopkins supported her, three recommended putting had resigned and not been terminated; and (2) at that time, the law was not clear, and the
her on hold, eight said they did not have enough information, and eight recommended assumption was that Title VII did not apply to partnership decisions in companies. With
denial. The partners in Hopkins’s office praised her character as well as her accomplish- the EEOC refusing to take action, Hopkins filed suit against Price Waterhouse. She has
ments, describing her in their joint statement as “an outstanding professional who had stated she filed the suit to find out why Price Waterhouse made “such a bad business deci-
a “deft touch” a “strong character, independence, and integrity. Clients appear to have sion.”Ill After a lengthy trial and numerous complex appeals through the federal system,
agreed with these assessments. One official from the State Department described her as the Supreme Court found that Ms. Hopkins did indeed have a cause of action for discrimi-
“extremely competent, intelligent” “strong and forthright, very productive, energetic, and nation in the partnership decision.
creative.” Another high-ranking official praised Hopkins’s decisiveness, broad-mindedness, Hopkins was an important employment discrimination case because the Supreme Court
and “intellectual clarity”; she was, in his words, “a stimulating conversationalist?96 Hopkins recognized stereotyping as a way of establishing discrimination. However, the case is also
“had no difficulty dealing with clients and her clients appear to have been very pleased known for its clarification of the law in situations in which employers take action against
with her work.”97 She “was generally viewed as a highly competent project leader who employees for both lawful and unlawful reasons. Known as mixed-motive cases, these cases
worked long hours, pushed vigorously to meet deadlines, and demanded much from the involved forms of discrimination that shift the burden of proof to the employer to establish
multidisciplinary staffs with which she worked.98
that it would have made the same decision if using only the lawful considerations and in
On too many occasions, however, Hopkins’s aggressiveness apparently spilled over into spite of unlawful considerations that entered into the process. The “same-decision” defense
abrasiveness. Staff members seem to have borne the brunt of Hopkins’s brusqueness. Long requires employers to establish sufficient grounds for termination or other actions taken
before her bid for partnership, partners evaluating her work had counseled her to improve against employees that are independent of the unlawful considerations.
her relations with staff members. Although later evaluations indicate an improvement, In 1990, on remand, Ms. Hopkins was awarded her partnership112 and damages. She
Hopkins’s perceived shortcomings in this important area eventually doomed her bid for was awarded back pay plus interest, and although the exact amount of the award is unclear,
partnership. Virtually all of the partners’ negative remarks about Hopkins—even those of Hopkins later verified that she paid $300,000 in taxes on her award that year and also paid
partners who supported her—concerned her “interpersonal skills” Both “[s]upporters and her attorneys the $500,000 due to them. Ms. Hopkins was also awarded her partnership
opponents of her candidacy indicated that she was sometimes overly aggressive, unduly and rejoined Price Waterhouse as a partner in 1991.
harsh, difficult to work with, and impatient with staff?99
In accounting firms generally, the number of female principals has grown from 1% in
Another partner testified at trial that he had questioned her billing records and was left
1983 to 18% today. Ms. Hopkins retired from PricewaterhouseCoopers in 2002, and she
with concern because he found her answers unsatisfying:
has written a book about her experience as a litigant.
I was informed by Ann that the project had been completed on sked within budget. My subsequent review indi- Discussion Questions
cated a significant discrepancy of approximately $35,000 between the proposed fees, billed fees [and] actuals
in the WIPS. I discussed this matter with Ann who attempted to try and explain away or play down the discrep-
1. What ethical problems do you see with the Price 4. To what extent did the partners’ comments reflect
ancy. She insisted there had not been a discrepancy in the amount of the underrealization. Unsatisfied with her
Waterhouse partnership evaluation system?
mixed motives (i.e., to what extent did their points
responses, I continued to question the matter until she admitted there was a problem but I should discuss it with
2. Suppose that you were a partner and a member express legal factors while at the same time
Krulwich (a partner at OGS). My subsequent discussion with Lew indicated that the discrepancy was a result of
of either the admissions committee or the policy expressing illegal ones)?
500 additional hours being charged to the job (at the request of Bill Devaney … agreed to by Krulwich) after it
board. What objections, if any, would you have 5. Ms. Hopkins listed three factors to help companies
was determined that Linda Pegues, a senior consultant from the Houston office working on the project had been
made to any of the comments by the partners? avoid what happened to her: (1) clear direction from
instructed by Ann to work 12–14 hrs per day during the project but only to charge 8 hours per day. The entire inci-
What would have made it difficult for you to object? the top of the enterprise, (2) diversity in manage-
dent left me questioning Ann’s staff management methods and the honesty of her responses to my questions. 10
How might your being a female partner in that posi- ment, and (3) specificity in evaluation criteria. Give
tion have made objection more difficult?
examples of how a company could implement these
Clear signs indicated, though, that some of the partners reacted negatively to Hopkins’s 3. In what ways, if any, do you find the subjectivity of factors.
personality because she was a woman. One partner described her as “macho,” whereas
the evaluation troublesome? What aspects of the
evaluation would you change?
another suggested that she “overcompensated for being a woman,” and a third advised
her to take “a course at charm school.”101 One partner wrote that Hopkins was “univer-
sally disliked.”102 Several partners criticized her use of profanity. In response, one partner
suggested that those partners objected to her swearing only “because it[*]s a lady using
foul language ??103 Another supporter explained that Hopkins “ha[d] matured from a tough-
talking somewhat masculine hardnosed manager to an authoritative, formidable, but much
100

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