GSA Overspending Scandal: "Aggrieved by the Gall"

The General Services Administration (GSA) is under investigation for spending $823,000 at a Las Vegas conference in 2010.  The GSA is responsible for purchasing products, transportation, and office space for other government agencies, and ironically, is charged with developing cost-containment policies.

Martha Johnson, head of the GSA as of February 2010, has resigned amid the controversy.  In her testimony to Congress, Johnson admitted that the Western region training conference "evolved into a raucous, extravagant, arrogant, self-congratulatory event that ultimately belittled federal workers and would stain the very work that other committed staff and I were preparing to do." She also said that "[T]he expensive planning for that conference was well under way when I entered GSA, and I was unaware of the scope" and that she was "extremely aggrieved by the gall of a handful of people to misuse federal tax dollars, twist contracting rules and defile the great name of the General Services Administration."

Johnson's strong statement was in sharp contrast to that of Jeffrey Neely, a GSA executive who evoked his Fifth amendment right not to answer any questions. As reported by CNN, Rep. Elijah Cummings of Maryland criticized Neely specifically:

"'In one e-mail...Mr. Neely invited personal friends to the conference, writing, and I quote -- and this is simply incredible -- quote: "We'll get you guys a room near us, and we'll pick up the room tab. Could be a blast." End of quote. He then went on and wrote this -- "I know I'm bad, but as Deb and I often say, why not enjoy it while we have it and while we can. Ain't gonna last forever." End of quote. Well, Mr. Neely, it stops now.'"

Included in the evidence of the overspending scandal is this video, showing a GSA employee's joke about perks and then an award given to that employee at a GSA dinner at the conference.

Discussion Starters:

• Review the steps for ethical decision making. Which would have helped these administrators re-think their choices?
• How do you assess the GSA employee's video and award? Is this incriminating, just office fun, or something else?
• Grammar Check: The section above about Rep. Cummings has a quote within a quote within a quote. Is it punctuated correctly?

KFC Apologizes to Thailand Earthquake Victims

Connecting chicken to the earthquake in Thailand, KFC posted this on its Facebook wall as people were being evacuated from the beaches: "Let's hurry home and follow the earthquake news. And don't forget to order your favorite KFC menu."

People didn't respond well. Admitting its mistake, KFC removed the post within a day and replaced it with this statement:

"KFC Thailand expresses its sincere regret for the improper post on its Facebook page and apologizes for the insensitivity and timing of the message." 

This isn't the first time a company used a tragic or emotionally charged event to promote its products (and it probably won't be the last). Kenneth Cole learned a tough lesson when he encouraged people to buy his "spring collection" clothing during the uprising in Cairo. And a blogger called Amy Winehouse's death a "wake-up call for small business owners."

Companies need to be smarter about how they use social media. Sure, they can take some risks, but mixing sales and disaster likely leads only to disaster.

Discussion Starters:

• Can you think of any time when using a tragedy to promote a company's products would be viewed positively, for example, after a certain period of time? 
• Assess KFC's apology. Do you find it convincing? Should the company have done anything else to demonstrate its regret?

Councilman Pays $28,800 for Tweets

A Philadelphia councilman needs help with that transparent, authentic social media voice on Twitter, so he hired a firm to tweet for him. Jim Kenney hired ChatterBlast to help with his social media strategy, including monitoring his Facebook and Twitter accounts and writing posts.

Kenney explains why he needs this help: 

"I, at 53 years old, do not have that facility. So I need consultant advice to communicate with a group of folks who are not necessarily in my age group."

In addition to hiring ChatterBlast, Kenney has hired an outside communications consultant, Martin O'Rourke. In an embarrassing admission, O'Rourke described his own limitations:

"I have no clue how to tweet; I still don't understand the mechanics of it. It's a thing of the future."

ChatterBlast promotes its services to government officials in this way: 

"Interactive online communities represent a whole new arena of vocal constituents. ChatterBlast uses social media networks, targeted advertising and digital marketing to deliver real-time, personalized and high-impact messages while building a community of supporters.  We can listen to what is being said about you or your organization in real-time, faster and more accurately then pollsters. More importantly, we can engage and address the naysayers while promoting and rewarding positive feedback. 

"If you are an agency or elected official, social media can be used to keep in touch with your constituents and address issues before they become a crisis. If you are running for office, social media provides a new untapped fundraising channel.  Maintaining an active and identifiable base can be managed before, during, and after your campaign.  We can even help secure your votes before campaign time begins."

Discussion Starters:

• What are the ethical considerations in this situation? 
• Where do you see the line between how an outside firm helps a person or a company develop and implement a social media strategy and how that firm implements the strategy?
• Under what, if any, circumstances should an individual hire an outside firm to tweet on his or her behalf?

Study Compares Honesty on LinkedIn Profiles and Resumes

A new Cornell University study published in Cyberpsychology, Behavior and Social Networking reveals that undergraduates are more accurate in describing work experience on their LinkedIn profile than on their resume. However, they are more deceptive in describing their hobbies.

The public nature of LinkedIn makes it easy to verify falsifications. Imagine connecting with your previous boss on the site, only for her to see a  job title that doesn't exist or responsibilities you didn't do. This is good news for employers wanting to check applicants' resumes and may be one reason that 48% of employers say they do so before making a hiring decision.

But according to Jamie Guillory, the study's lead author, students on LinkedIn "still found ways to make themselves look better" and took more liberties when describing hobbies, which are harder to verify. About 92% of students exaggerated or omitted information at least once on LinkedIn or their resumes, with students making these decisions an average of three times.

Discussion Starters and Assignment Ideas:

• Are you more truthful on your LinkedIn profile than on your resume? In what ways?
• Where you we cross the line between exaggerations and lies? What would you consider unethical? Give a few examples to explain your thinking.
• Identify any potential exaggerations or omissions on either your LinkedIn profile or on your resume. What are the potential consequences if this information is discovered to be false? In retrospect, is it worth the risk?
• Swap resumes with a partner. Choose a few items-work experience, activities, or interests-and interview each other. Ask specific, pointed questions to try to verify the information. Do you uncover any potential issues with how the information is described? What, if anything, will you change on your resume as a result of this process?

Controversy About "Homeless Hotspots" at SXSW

At South by Southwest (SXSW), a music, film, and technology conference, a marketing agency had an idea to help attendees get online. BBH Labs gave 13 people from a homeless shelter devices and T-shirts that give people Internet access, a hot commodity at the high-tech conference.

The program, "Homeless Hotspots," has been criticized by the New York Times and others. A writer for the New York Times SXSW blog asks, "When the infrastructure fails us… we turn human beings into infrastructure?" Tim Carmody of Wired.com said it "sounds like something out of a darkly satirical science-fiction dystopia." To many, the concept feels exploitative, a way of using homeless people to support the wealthy and connected.

Defenders of the program say it's a clever way to raise awareness about homelessness. Mitchell Gibbs, the director of development at Front Steps, from where the homeless people were recruited, supported the program. BBH says the program is modeled after Street News, a newspaper about homeless people sold by homeless people. BBH also clarified that participants at SXSW were given $20 each day and are keeping whatever money they get when people donate online.

Discussion Starters:

• What's your view of the program? Is it clever, exploitative, or something else?
• If you were at the SXSW conference, how you think you might feel about using one of the hotspots?

Foxconn (and Apple) on the Defensive

In response to criticism about pay and working conditions, Apple product manufacturer Foxconn announced plans to raise wages. However, the numbers and the amount of overtime worked have been questioned.

ABC News visited the Shenzhen, China, factory and showed a grim side of the work: teenagers working long hours doing repetitive tasks and living in cramped dormitories. Foxconn workers make iPhones, iPads and other prized products.

Apple has a few dedicated pages on its website to demonstrate its commitment to "Supplier Responsibility." Instructors and students of business communication might find the company's reports interesting in light of the Foxconn criticism.

Foxconn recently hired PR firm Burson-Marstellar to help control the bad press.

Assignment Ideas:

• Create a PowerPoint presentation to explain the discrepancy in wages, as discussed in the New York Times blog. The calculations are a bit confusing, so try to clarify them with good visuals and talking headings.
• Read Apple's Supplier Responsibility 2012 Progress Report. Analyze how the report is organized. What are the strengths of the report? What is missing?

Sugarland Flubs Response to Victims

Country music group Sugarland is facing lawsuits following a stage collapse at a concert last summer. At the Indiana State Fair, seven people were killed and 45 were injured. 

In the lawsuits, victims and their families criticize the band and the fair for not postponing the show because of bad weather conditions and not evacuating more quickly. Attorneys for Sugarland responded harshly to the allegations: "Some or all of the plaintiffs' claimed injuries resulted from their own fault." Critics call the legal approach "cowardly." Read the entire legal statement. 

The statement is a dramatic contrast to what Jennifer Nettles, lead singer, said two days after the incident:

"...moved by the grief of those families who lost loved ones. Moved by the pain of those who were injured and the fear of their families. Moved by the great heroism as I watched so many brave Indianapolis fans actually run toward the stage to try and help lift and rescue those injured. Moved by the quickness and organization of the emergency workers who set up the triage and tended to the injured."

In response to criticism of the legal statement, Gail Gellman, Sugarland's manager, posted this on the group's website:

"Sadly when a tragedy occurs, people want to point fingers and try to sensationalize the disaster. The single most important thing to Sugarland, are their fans. Their support and love over the past 9 years has been unmatched. For anyone to think otherwise is completely devastating to them."

Also on the website are comments from many supportive fans, who compliment Sugarland and their music.

Although Sugarland had been tweeting almost daily, their last tweet was on February 15-now a week ago. Fans might like to hear directly from the duo.

Discussion Starters:

• What is the attorney's perspective in this situation? Do you agree with this position?
• What should the Sugarland duo do at this point? What, if anything, should they tweet or write on their website? What are the potential consequences, and is it worth it?

Oprah Apologizes for Nielsen Tweet

When Oprah tweeted this message to her 9 million followers, she didn't expect such strong criticism; she just wanted to promote her network.

However, as it turns out, the ratings agency considered the tweet a "potentially serious violation of its policy." Nielsen strives for objectivity in measuring what shows people watch. Trying to coerce viewers is not acceptable.

Reactions on Twitter varied: some were supportive, while others called Oprah's tweet "unethical" and "desperate." Because Nielsen was misspelled in her tweet, people questioned whether she was the writer, but her executive producer confirmed that she was.

In another tweet, Oprah apologized: 

She also told The New York Times, "I removed the tweet at the request of Nielsen. I intended no harm and apologize for the reference."

Discussion Starters:

• Do you consider Oprah's tweet to be an innocent mistake, a savvy marketing move, unethical, or something else?
• The OWN network has shown disappointing viewership, but what are better ways for Oprah to promote her network via social media?
  

Brazil Addresses "Technological Slavery"

Brazil has passed a new law that makes employees eligible to request overtime pay for email and phone calls after work hours. The Brazilian government views emails to employees' smartphones as orders. The law addresses what a labor lawyer in this CNN video calls "technological slavery."

Discussion Starters:

• What's your view of the new law? 
• Is this a good idea for United States? Would it work? The video mentions difficulty in enforcement. What other challenges could you see?
• How else could we avoid the 24/7 nature of work?

Auschwitz to Sell Fitness?

The Circuit Factory, a gym in Dubai, used an Auschwitz photo to sell membership.

No surprise, the company heard a strong reaction to the campaign on sites such as Facebook and Twitter.

The Circuit Factory responded by firing its "creative guy," pledging a donation to an undetermined charity, and apologizing:

The Anti-Defamation League issued this statement about the incident:

"We are increasingly troubled by both the ignorance and mindset of a generation that appears to be so distant from a basic understanding of the Holocaust that it seems acceptable to use this horrific tragedy as a gimmick to bring attention to promoting losing weight."

Despite the public reaction, the campaign may have worked, as Circuit Factory founder Phil Parkinson told Arabian Business News:

"A huge number people have researched or Googled… our YouTube channel has shot up, our [Facebook] group page has got an hundred extra members in minutes and we have had about five times as many enquiries as before," he said. "It has got to the point I am nervous that I can't cater for demand."

Discussion Starters:

• What's your reaction to the ad? Do you find it funny, offensive, or something else?
• What do you make of the increased interest in the gym? Did the campaign pay off, after all? 
• How can a company avoid this type of campaign, which may offend people?

Campaign Against Child Obesity Called "Harsh"

How would you feel if your child or brother or sister were profiled in one of these anti-obesity ads? 

The Children's Healthcare of Atlanta has taken emotional appeal to a new level to tackle the problem of childhood obesity in Georgia. Focusing on illness and social isolation, five videos show children who are obese and in distress. With this approach, the organization is trying to encourage families to take the issue seriously.

Critics say the organization's Strong4Life campaign has gone too far by stigmatizing the profiled children. Also, the ads give little guidance to how parents can help their overweight children.

Others say the ads attract attention, as they should, and that they are part of a five-year campaign that has just started. An executive at Children's Healthcare defends the campaign: "The whole goal of this is to get the discussion going," she said. "I love that it sparks dialogue, and a great dialogue has two sides." The organization also posted several comments on Facebook:

Discussion Starters:

• What is your reaction to these ads? Do you find them offensive, effective, or something else?
• How could the next phase of the campaign address the critics' concerns? What tactics would you recommend to the writers of the ads?

The 1% Speak Out: "I am a fat cat. I'm not ashamed"

A recent Bloomberg article describes how wealthy Americans are speaking out in response to attacks from the Occupy Wall Street movement. Top U.S. earners have been criticized for not paying enough taxes and contributing to the increasing income inequality, which, in 2007, was greater than that of China and Iran.

Arguments from the richest 1% include their right to earn and keep their income (particularly given high government spending) and how few low-income Americans pay taxes. One recent persuasive letter to President Obama is from Leon G. Cooperman,  a hedge-fund manager. In this video, Peter Schiff, investor, author, and commentator, defends the wealthy in discussion with Occupy Wall Street protestors.

Contrast this perspective with that of billionaire investor Warren Buffett. In August, Buffett wrote an opinion letter in the New York Times called Stop Coddling the Super-Rich.

Most millionaires agree with Warren Buffett and support a tax increase, as reported on wsj.com:

A new survey from Spectrem Group found that 68% of millionaires (those with investments of $1 million or more)  support raising taxes on those with $1 million or more in income. Fully 61% of those with net worths of $5 million or more support the tax on million-plus earners.  

Assignment Ideas:

• Research different perspectives of this story further: look at the Occupy Wall Street website, read the Bloomberg article, and find letters and videos of executives and others to get a complete picture of both sides of the argument.
• Write an assessment of all persuasive arguments. How does each side use logical arguments, emotional appeal, and credibility to explain their perspective?
• In small groups, choose one line of reasoning and defend your position. How can you support your view with research about the issue?

Victoria's Secret Responds to Child Labor Allegations

A Bloomberg report paints a grim picture of a West African 13-year-old girl who sleeps on a thin, plastic mat; works in 100-degree heat; is beaten; and is fed once a day some days, but not at all on others. Clarissa works for a farm certified as organic and fair trade-and supplies cotton to Victoria's Secret. Video on Bloomberg.

Although only a small amount of cotton for Victoria's Secret comes from this region, the company has issued a response, vowing to investigate the situation. In its statement, the company explains the original goals of the program in the region:

In 2007, we established a pilot program to purchase Fairtrade-certified organic cotton from primarily women farmers in Burkina Faso, a landlocked country in West Africa that struggles with endemic poverty. We were committed to this initiative because of its potential to generate life-changing opportunities for some of the world's poorest women.

In the statement, Victoria's Secret maintains its "goal of improving the lives of women and children in a country where a large portion of the population lives on less than a dollar a day. "

Discussion Starters:

• If you're a Victoria's secret customer, does the news affect your buying decisions? Does the company's response affect your buying decisions?
• Read Victoria's Secret entire response. What do you consider the strongest and weakest arguments presented? How do you assess the company's focus on their goals of helping women and children?

FedEx's New Sustainability Ad

FedEx's new commercial conveys its "Sustainable Solutions" in an animated story of "how a shipping giant can befriend a forest." The spot was Advertising Age's Creativity Pick of the Day.

On its website, FedEx touts its sustainability initiatives in three areas: the environment, our people, and our community. In another funny commercial, FedEx executives suggest printing on the back of used paper, but this doesn't turn out to be such a good idea.

Clearly, FedEx is trying to improve its sustainability image. A 2006 report by Roberts Environmental Center gave the company a C- rating:

On its website, Federal Express provided only minimal environmental and social
data. While their efforts to improve fuel and delivery efficiency are
commendable, their environmental website lacked any performance indicators
that would increase transparency. The corporation's partnership with
Environmental Defense is notable, and the results of this collaboration are
promising. Despite Federal Express' positive reputation for corporate
responsibility, they did not provide the information necessary to score well in
this report. It seems as though Federal Express has the appropriate data, it
need only make it readily available to the public.

Discussion Starters:

• What are the key messages in the new ad? In what ways is the ad successful in conveying FedEx's sustainability initiatives? In what ways could the messages be clearer?
• Review FedEx's "Environment" web page today. In what ways has the company addressed criticism of the Robert's Environmental Center report? In what ways could the company still improve?

How Not to Get a Job: Hack Into a Company's System

A Hungarian man wanted a job so badly that he hacked into Marriott's computer system and threatened to release confidential information unless he got hired. To discover the identity of the man, a Secret Service agent posed as a Marriott HR representative, and the company booked a flight for the hacker to come for an interview.

Of course, the interview wasn't what the hacker, Attila Nemeth, expected. On Wednesday, Nemeth pleaded guilty and now faces up to 15 years in prison. Marriott is not unscathed either: the company estimates spending between $400,000 and $1 million in consultants' fees, employees' salaries, and other expenses to solve the crime.

Discussion Starters:

• Review the ethical decision-making guidelines in Chapter 1. In addition to the illegality, what tells you that Nemeth's behavior is unethical?
• Some people will do anything to avoid a behavioral interview. What are some behavioral interview questions that might be appropriate for an IT professional?

Employer Backlash: "I will never hire a Penn Stater"

Among the many online letters to the editor of Penn State's Daily Collegian is a sharp backlash from a potential employer. Some worry that Penn State students may have difficulty finding jobs because of the recent sexual abuse scandal and riots.

In an open letter on Penn State's website, the senior director of career services provides guidance to students during the job search and encourages employers to keep an open mind.

Discussion Starters:

• Do you agree with employers who may resist hiring Penn State students? Why or why not?
• What is the best way for Penn State students to address questions from prospective employers? Do you find Jeff Garvis's advice in the letter helpful?
• In Garvis's letter, which arguments do you find most and least convincing for employers? 
• If you look closely at Garvis's letter, you see what look like font changes within the paragraph that starts "Students may acknowledge." [Download] If these are editorial changes, why do you think they were made? Do they improve the message?

In Statement, Paterno Says, "I Wish I Had Done More" (and update)

Penn State's Board of Trustees took decisive action Wednesday night and fired both Coach Paterno and president Spanier in response to the sexual abuse scandal that has rocked the university. Paterno had submitted his resignation, but the Trustees decided that he would not coach another game.

Before the Trustee's decision, the legendary football coach gave an emotional farewell talk to his team and coaches and issued a statement, read here on the Tim Brando show (text below):

I have come to work every day for the last 61 years with one clear goal in mind: to serve the best interests of this university and the young men who have been entrusted to my care. I have the same goal today.

That's why I have decided to announce my retirement effective at the end of this season. At this moment the Board of Trustees should not spend a single minute discussing my status. They have far more important matters to address. I want to make this as easy for them as I possibly can.

This is a tragedy. It is one of the great sorrows of my life. With the benefit of hindsight, I wish I had done more.

I am absolutely devastated by the developments in this case. I grieve for the children and their families, and I pray for their comfort and relief.

My goals now are to keep my commitments to my players and staff and finish the season with dignity and determination. And then I will spend the rest of my life doing everything I can to help this University.

Spanier issued his own statement following the news of his termination.

Discussion Starters:

• Is Paterno's statement appropriate, given the situation? Would you expect to see something different?
• Why do you think Paterno decided to resign? Was this the right decision at the right time?
• How do you assess the Trustees' decision to fire Paterno and Spanier? Do you side with the Trustees or the protesting students?
• How do you assess Spanier's statement? In what ways is his statement appropriate or inappropriate in this situation?

Penn State Flubs Response to Child Abuse Accusations

Former Penn State Defensive Coach Jerry Sandusky has been arrested for abusing eight minors. Apparently, Athletic Director Tim Curley and VP for Finance and Business Gary Schultz were told about one incident but kept silent. They have since been charged with perjury.

The president of Penn State, Graham Spanier, issued a statement backing Curley and Schultz:

The allegations about a former coach are troubling, and it is appropriate that they be investigated thoroughly. Protecting children requires the utmost vigilance.

With regard to the other presentments, I wish to say that Tim Curley and Gary Schultz have my unconditional support. I have known and worked daily with Tim and Gary for more than 16 years. I have complete confidence in how they have handled the allegations about a former University employee.

Tim Curley and Gary Schultz operate at the highest levels of honesty, integrity and compassion. I am confident the record will show that these charges are groundless and that they conducted themselves professionally and appropriately.

The president has been harshly criticized for his response. One media expert offered this alternative for the university's response:

I am horrified to learn about the sexual abuse of eight minors. As a parent, I understand just how sacred a responsibility we all have to keep children safe. We will cooperate fully with the investigation and do everything possible to make sure this never happens again.

As for Mr. Curley and Mr. Schultz, I would ask everyone to wait until the facts of the case have fully emerged before forming a judgment.

This statement more appropriately acknowledges the victims without aligning the university with Curley and Schultz. Since the president issued the statement, Curley has been placed on administrative leave, and Schultz has stepped down and retired from the university.

The Board of Trustees of Penn State University are also planning for the dismissal of Joe Paterno, the current football coach, who, according to a New York Times article, "has more victories than any other coach at college football's top level and who made Penn State a prestigious national brand."

 Discussion Starters:

• How do you assess the proposed rewrite of the president's statement? What are the improvements -- and what are the risks -- of such a statement?
• Do you agree with the university's decisions to 1) place Curley on administrative leave, 2) accept the resignation/retirement of Schultz, and 3) plan the exit of Paterno? Why or why not?

Herman Cain's "Smoking" Video Goes Viral

Campaign manager Mark Block is a one-man show in a promotional video for Republican candidate Herman Cain. Speaking to a severely close camera, Block encourages Americans to take action:

Tomorrow is one day closer to the White House. I really believe that Herman Cain will put united back in the United States of America, and if I didn't believe that, I wouldn't be here. We've run a campaign like nobody's ever seen. But then, Americans never seen a candidate like Herman Cain. We need you to get involved because, together, we can do this. We can take this country back.

Then, Cain takes a drag of a cigarette. Cue the patriotic music, show the award-winning Herman Cain smile, and you have yourself a viral video.

Asked about the video, Cain said, "We weren't trying to send any subliminal message whatsoever. Many of us found it hilarious because we know Mark Block."

The video has received a lot of attention. On the Colbert Report, Stephen Colbert pokes fun of the ad by lighting up a cigarette and showing his own version of Cain videos.

Discussion Starters:

• What is Mark Block's strategy with this video? Do you believe he was successful?
• What ethical issues do you see in connection with this ad?
• What are the potential ramifications for Herman Cain and his candidacy?

Goldman Sachs Reneges on Dinner and Donation

Goldman Sachs had intended to attend a fund-raising dinner for the Lower East Side People's Federal Credit Union, a small organization that lends to the poor. But when the invitations went out, they listed "Occupy Wall Street" as one of the honorees. Goldman, identified as an event sponsor, pulled its $5,000 funding pledge and declined the invitation. (The company continues to fund the Credit Union's financial education program.)

According to event organizers, Goldman didn't want to be associated with the Occupy Wall Street movement, whose members carry signs such as, "Goldman Sachs is the work of the devil." The company has been a target of some of the demonstrations, such as this one in Boston.

"Their money was welcome, but not at the price of giving up what we believe in," said a Credit Union representative. "We lost their $5,000, but we have our principles."

Apparently, the discussion about the decision was interesting. According to one source affiliated with the event, "It was one of those email exchanges that you talk about the next day at the office." I hope the emails make the Internet rounds soon!

Discussion Starters:

• What do the Occupy Wall Street demonstrators stand for, and how does this affect companies such as Goldman Sachs?
• Do you agree with Goldman's decision about the dinner? Why or why not?
• What are the potential consequences of the company's decision?