The Pondscum of American Industry

©1998
ISBN 0-324-00251-3

Case Teaching Package
A case teaching package is available for this case. It includes strategies for case presentation, key concepts, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into your course.

Length
This case is 22 pages in length and its case teaching package is 8 pages.

Abstract

Ed Russell, a top General Electric industrial diamond vice president, feels he has been fired because he blew the whistle on a price-fixing conspiracy between his boss and the DeBeers Diamond cartel. Seeking either his old job or compensatory damages, Ed is suing GE for wrongful discharge while citing both illegal, immoral, and unprofessional activities practiced by his company's marketing executives. More importantly, his suit charges that even GE's highly-regarded President and CEO, Jack Welch, was part of the conspiracy. GE says Ed was fired for poor job performance, however, and is looking forward to proving it in court.

Linkages to Textbooks or Journal Articles/Fit Within a Course

This case has been designed to be used by graduate and undergraduate marketing major students to deal with ethical and legal issues associated with trade practices in the United States and abroad, and to view the possible role an industry's structure has upon a company's behavior.

Study Questions

1. Peter Harben and Richard Nötstaller, diamond marketing experts, state that the DeBeers diamond monopoly has been allowed to not only exist but to also flourish, because it benefits not only DeBeers but also the industry's producers, dealers, cutters, jewellers, and customers. To what degree is this statement true? Which group or individuals have benefitted the most from the diamond cartel? Have any groups or individuals been harmed by the existence of the DeBeers diamond cartel?
2. Jack Welch has said that the two quickest ways to get fired at GE are "one, to commit an integrity violation, or, two, to be a controlling, turf-fending, oppressive manager who can't change and who saps and squeezes people rather than excites and draws out their energy and creativity." In stating that Ed Russell was fired for poor performance reasons, what role do you believe Jack Welch's two reasons for a quick firing played in having Glen Hiner fire Russell?
3. Four different whistleblower types are identified in Appendix C. Into which category would you place Edward Russell?
4. Was Ed Russell a whistleblower according to your understanding of Ohio's whistle-blower statute, Ohio Rev. Ann. Code §4113.52 presented in Appendix D?
5. Assuming Ed Russell wanted to correct what he thought was misbehavior by GE and its executives, but that he did not want to have to file a lawsuit to accomplish his end, what typical internal and external alternatives would have been available to an executive in his position?