Project Management Case Studies, 7th Edition

Part 13MORALITY AND ETHICS

When the survival of the firm is at stake, workers often make decisions that may violate moral and ethical principles. Some may view an action as a violation, whereas others may view it as an acceptable practice. Every day, people are placed in situations that may require a moral or ethical decision.

Some companies have found a solution to this problem by creating a standard practice manual or corporate credo that provides guidelines for how these decisions should be made. The guidelines identify the order in which certain stakeholders’ interests should be satisfied.

The Project Management Lawsuit

BACKGROUND

A new president was hired and then restructured the company in a way that he thought would be better for project management. In doing this restructuring, the president violated a contractual agreement that had been made with the vice president of engineering hired three years earlier.

HIRING THE VICE PRESIDENT

In 2006, Phoenix Company hired Jim as vice president for engineering. As with all senior officers, the hiring process included a written contract that clearly stipulated the criteria for bonuses, stock options, severance packages, retirement packages, and golden parachutes.

Jim's bonus clause involved project management. All of the engineering projects would be headed up by project managers who would report directly to Jim. While part of Jim's bonus was based on overall corporate profitability, the selling price of the company’ stock, ...