13 April 2012

Management Case Study: Lawsuit

If for no other reason than to keep myself in touch with management principles, let us consider this hypothetical management problem: a company officer gets into an altercation with a customer while in the execution of his duties. To the customer, the altercation was grave enough to make him file a case in court against the officer.

Issued a subpoena by the court, the officer turns to his company to ask for assistance. Does the company provide the requested assistance or leave him to deal with the situation on his own on the assumption that the altercation was the consequence of a personal rather than an official action?

The first and obvious question to ask is where and how do you draw the line between what is personal and what is official?

If the employee went outside the premises of the company building for a quiet smoke and then got into an altercation with a customer after hitting the latter with a carelessly thrown cigarette butt, then the altercation had nothing to do with official business and was obviously personal.

However, if the altercation happened inside the employee’s office and as a consequence of his execution of his functions, then the action was – right or wrong – done in an official capacity. In other words, at the time of the altercation, the employee was representing the company.

My own personal take on the situation is that the lawsuit against the employee is, for all intents and purposes, a lawsuit against the company; and ought to be treated as such. In the first place, the situation that led to the lawsuit would not have occurred had the employee been on his own personal time and acting entirely on his own with no relation whatsoever to his work.

The second point to consider is if company rules, regulations and policies were breached by the officer in the execution of his duties that led to the altercation. If these were, then the officer ought to be at the very least privately censured or even dismissed depending on the severity of the infractions and an official apology issued to the offended party.

Legal assistance, in my view, is out of the question since the officer’s actions were contrary to policies that were in the first place established to deal with – among other things – customer relations. It is bad management – and bad PR – to appear to be publicly condoning policy breaches.

However, if no company rules, regulations and policies were breached and the altercation was the consequence of the officer’s honest execution of his duties, it goes without saying that legal assistance must be provided.

The employee, after all, is part of the organization. The customer is not. While customers are the very people from whom the company draws its profits from, a situation has arisen when one particular customer has become a legal adversary.

When a company appoints an employee to a position of responsibility, management support is implicit. How can any employee perform his duties securely without it?

Management just cannot take the position that because an employee is appointed to a position of responsibility, he will execute his duties to perfection. What sort of company thinks that way, for crying out loud?

In other words, that the employee is in a particular position in the first place is already a decision by management. Therefore, indirectly, whatever that employee does is a consequence of a management decision.

Unless the employee has a big S on his shirt front and wears his pants outside his jocks, then everyone is prone to make a mistake now and again. Nothing in the workplace is ever perfect.

That is why there is a management structure to turn to when things are not going well. If management support cannot be counted on, then there will be employee morale to contend with.

To get back to the hypothetical management problem in this discussion, the fact that it got to the point of a lawsuit at all indicates a breakdown in communication somewhere. Any altercation is a consequence of anger. The lawsuit, therefore, was still a consequence of this anger.

Anger can be diffused. So we assume that either management did not hear of the altercation or lifted no finger to try and diffuse its possible consequences.

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