Hewlett Packard Ethics

Module 2 Case Assignment

ETH501: Business Ethics

August 10, 2009

It is not just during the five o-clock news anymore. With instant messages and internet cell phones we are continually bombarded by the media with stories of fraud, scandal, and lawsuits stemming from corporate America. One recent headline surrounded the company that produced the very computer used to write this paper and prompted Newsweek columnist David Kaplan to label the entire ordeal, “a tragicomedy that Shakespeare might've penned had he gotten an M.B.A” (2006). In September of 2006, the New York Times reported that, “A secret investigation of news leaks at Hewlett-Packard was more elaborate than previously reported, and almost from the start involved the illicit gathering of private phone records and direct surveillance of board members and journalists” (Darlin). At the time, Patricia C. Dunn was the company chair and was actually indicted on felony charges by the California attorney general shortly after the investigation began. She promptly resigned from her position at HP and although she was cleared of all charges brought against her by the state (Quinn & Lifsher, 2007), her decision to resign was justified and as it should have been. She was responsible for the actions of those under her direction and her name and face were now inseparably connected in the public’s view to a scandal. For the good of the company and the good of the whole (the shareholders), she needed to leave.

Dunn was raised in Las Vegas where her father worked for the casinos and her mother was a showgirl. Her father died when she was just 12 years old and her mother had serious emotional problems, so after moving to the bay area of northern California, she was forced to quickly grow up. She graduated from Berkley and landed a temp job as a typist in an investing firm and eventually, through several mergers, became the CEO of Barclays Global Investors.

During her tenure as chairman of the board at HP, she became incensed at an apparent press leak from one of her directors. She ordered an internal investigation under the direction of Kevin Hunsaker, who was HP’s director of ethics (Darlin, September 2006). This investigation, however, was sub-contracted out to other “security experts who recruited private investigators who then took the extraordinary step of spying on the phone records of all the directors (including Dunn), as well as journalists (including the CNET reporter). These were not the records of calls from HP offices, but the records of calls made from personal accounts--like Perkins's home in Marin County” (Kaplan, 2006). The methods used to obtain these home records were also questionable at best.

While Dunn was not involved directly with the investigation or

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