Texaco - Diversity in Corporate America

Running header: CASE STUDY ANALYSIS

Case Study Analysis

Case Study Analysis

In today's Corporate America, diversity is highly emphasized. Starbucks website has an entire section detailing the diversity of the company and why it is so important. Interesting to know is that Corporate America has not always been seeking the limelight when it came to diversity. For a long time it was Corporate American was the white mans world. Things have definitely change and action legal action is being sought against discrimination in the workplace. Diversity is being integrated but the wounds from the past that are still healing or being fought linger. A fact is the 1999 lawsuit settlement from the big gas company called Texaco.

As mention in the case scenario, (Ethics as Organizational Cultural) Texaco paid out its largest settlement when they settled a lawsuit in the amount of $175 million. That caused a loss at the stock market with shares going for $3.00 per share. These after damaging audiotapes were accessible for viewing to the public. The isolated problems for Texaco were the highly public discrimination to their ethnic employees. This discrimination which lead to serious problems, ranged from racist language and behavior from all levels of employees to management. Texaco went so low as to pay employees at certain levels below minimum wage. In general the isolated problem that started this lawsuit was discrimination.

Today in America there are many who assume that racism does not exist as it did in the forties, fifties and sixties. There are many who think we have solved our discrimination problems and that African Americans live freely. However, there are many African Americans who work extremely hard in the workplace and certain individual thinking is still the same, they see only color.

In the Texaco case scenario as early detailed, discrimination was shown in the form of hiring practices, blatant racist language, and behavior by employees, ignored grievance claims from minority workers and Texaco managers were heard making racial slurs towards the African employees, the discrimination problems occurred within the whole company and not just one department. An official Texaco employee had also secretly made audio tapes of Texaco executives allegedly making racist remarks and plotting to destroy documents usable in the discrimination case during meetings.

The tapes allegedly recorded executives using crude racial slurs; the tapes were made available to the "New York Times" (Trevino, Nelson pg. 268) to inform the public of the practices of this large oil company towards the minorities in their company. Even though the company was in a financial downfall because of the large settlement and the raising cost of crude oil Texaco had to reduce their workforce of employees and increase their bottom-line. The Chief Executive Officer, Peter Bijur, decided to make Texaco a better company by addressing the issues of the discrimination to "make us a better company" instead of concentrating on the bottom-line.

"What the CEO decided to do was to put in a system of inquiry to address discrimination issues. Mr. Bijur's first plan of action was to inform the entire company that Texaco would no longer tolerate discrimination against anyone, no matter what their race, creed, religion or color. Mr. Bijur then spoke to the San Ramon, California Urban League where the Texaco corporate office is located and stated "that Texaco was going to make a real commitment in addressing discrimination issues. In addition, Texaco would incorporate a System of Inquiry into the company's business plan. This System of Inquiry would affect not only the employee's, but the supplier's customers and communities of the Texaco Company. The next step Mr. Bijur took was to hire African American's in some of the company's key roles such as a Director, General Counsel, and appointed an employee to head diversity within the company."

Mr. Bijur then set up a new recruiting system to increase the workforce of women and minorities in every position within the company. He instituted a program called "Minority and Women Business Development" which would increase the minority wholesalers and women Texaco did business with. Mr. Bijur contacted search firms, which is a form of headhunters or employment recruiters that had already had success in hiring minorities to help with the changes he was trying to implement in Texaco. Mr. Bijur set up other programs to encourage minorities to increase their knowledge of the business by offering scholarships and internships. His goal was to aid minority employees to succeed within the company.

Mr. Bijur included in Texaco's System of Inquiry that each and every employee would complete diversity training, much like sexual harassment training, as well as mentoring and development training to help prepare minorities for more leadership positions within the Texaco Company. Mr. Bijur also set up a process for any disputes which included hotlines, an outside ombudsman, and hired a company that investigates reported complaints (Merriam-Webster online dictionary). According to (Trevino, Nelson pg. 269) since the implementation of Mr. Bijur's System of Inquiry, Texaco has increased minority hiring to 44 percent with 22 percent of promotions being minorities. Because of the discrimination issues and lawsuit against Texaco many other companies have learned and implemented diverse systems of inquiry into their own businesses.

Incorporating a System of Inquiry is only the beginning of what Texaco and other companies need to do to keep discrimination out of their companies. According to Weldon Latham a diversity expert at a Washington; D.C law firm (Trevino, Nelson pg. 269) he states that "Texaco's a model for how to approach one of the biggest problems facing this country" discrimination.

The case story also suggests to the reader to visit Texaco's website (www.texaco.com) and read the reports by the monitoring task force. When reviewing the report we also found out that Chevron Oil Company has merged with Texaco; the report shows an increase in employee satisfaction of the companies. The report establishes a common understanding not only for those who work for Chevron Texaco, but for all who interact with the company. In 2004, more than 4,000 employees were members of Chevron, Texaco's employee networks and affinity groups which focus on mentoring, employee development, recruitment, community volunteerism, cultural awareness, and support for the company's diversity objectives. The system of inquiry put into action by the prior CEO, Peter Bijur is working for Chevron Texaco Company,