Dr.

Khan
MGMT 4395

Ana Hernandez

CASE 5.3

Sept 28, 2014

Procter & Gamble Goes Dumpster Diving

BRIEF OVERVIEW OF THE CASE DETAILS: John Pepper who is the chairman of Procter
& Gamble found out that new hires had obtained documents with information that can be used to
their advantage. Procter & Gambles fierce competitor, Unilever was unaware of that
information. Not sure how many were involved but at least one person had searched Unilevers
trash bins. As soon as John Pepper figured out all the details to the dumpster diving, he contacted
Unilevers chairman to fix the situation. Companies perform a competitive analysis in order to
better the company against competitors. Unfortunately Procter & Gamble did more than that by
hiring outside contractors. With the information discovered they were going launch a new
product in February. Dumpster diving is illegal in private property which Procter & Gamble was
responsible for. Unilever was not going to let things slide as well which are seeking a settlement
10 million as a consequence. Otherwise Unilever would take further action by filing a lawsuit
against them. Unilever also requested to remove all employees who had access to the
information and be assign a new job duty. One that would not have an impact in the information
they have obtained. In 2008, John Pepper made arrangements to travel to London for a final
negotiation.

I. MY REACTION: TO SOME THEORIES AND CONSTRUCTS-- This case concerns

ethical values but also legal matters. The dumpster diving in private property is prohibited which
made the case more complex. The ethicality concerning the case was unfair values. The new
hires of Proctor & Gamble should of consciously realized that it was unethical to use private

Dr. Khan
MGMT 4395

Ana Hernandez

CASE 5.3

Sept 28, 2014

information such a trade secrets to their advantage. Its almost like cheating your way to the top.
Even though there is a fierce market out there it does give the freedom to cheat in order to be the
best competitor.

II. LEARNING FROM THE CASE: (CRITCAL KNOWLEDGE GAINED TO APPLY)

1.) Employees need to be further trained in ethics (Boatright, 2010).
Employees need to be aware of the ethical consequences as well as the rules that need to
be followed. Maybe that would have avoided the new hires to dumpster dive. Otherwise by at
least making the effort to remind employees by a 30 minute presentation; if it is committed now
the company knows that they didnt it out of their own will and further action can be pursued.
2.) No matter the consequences, honesty is the best policy (Boatright, 2010).
In this case John Pepper, chairman, was a prime example of honesty. He knew that it was
wrong to not do the right thing. The information that his company had access too, would have
probably served him a competitive advantage, but he decided to the right thing by letting
competitive rival Unilever know. Which explains why Mr. Pepper upholds that leadership
position.
III. BEHAVIOR (that reinforces my ethical belief or refutes my ethical belief)
4.) Compromising between two parties is the best solution (Boatright, 2010).
Unilever used an effective method for punishment by following their request. Due to the
error that Procter & Gamble was a apart of, Unilever allowed them settle and come up with ann
agreement to resolve the matter. Otherwise what Procter & Gamble committed could have a
lawsuit against them. Procter & Gamble accepts the consequences and Unilever allows them to
compromise to resolve the issue.

Dr. Khan
MGMT 4395

Ana Hernandez

CASE 5.3

Sept 28, 2014

5.) Accepting your mistake and learning from it (Boatright, 2010).

Procter & Gamble knew they have made a mistake and wanted to come clean despite the
consequences. They accepted their mistake and did what was right and face the consequences. It
reinforces my ethical belief since I believe in acceptance and forgiveness. I think they handled
the matter professionally and even if it was unethical in the beginning they made it ethical at the
end.

IV. RESULTS (OF THE PERMANENT CHANGES IN MY BEHAVIOR): One important

thing I learned from this case is to face the truth. Procter & Gamble could have faced serious
consequences if they decide to hide the documents and not come clean about it. As an employee
myself I have learned that sometimes no matter how bad it is you just have to be honest. I
enjoyed reading the case and learning from it.
V. ANALYSIS OF BEHAVIORS FROM QUESTIONS :
Q 1.) Is dumpster diving and ethical way of acquiring information from a competitor?
No, dumpster diving is prohibited on private property and it is not ethical either. Cheating
your way to the top will only give you more complications in the future. It can be stressful to
want to succeed, especially if you see your rival succeeding and not you. But you have to find a
different alternative or face legal consequences.
Q 2.) Although John Pepper acted courageously in notifying Unilever, was his action
morally required? In view of the reaction from Unilever, did he act wisely?
I do agree that John Pepper acted courageously by notifying Unilever. Personally I do
believe that it was morally required because even though he was not the one to dumpster dive for
the information; he would have been just as liable. If I was Unilever I would actually be impress
that John Pepper did that because it is not easy to do especially if the information could have

Dr. Khan
MGMT 4395

Ana Hernandez

CASE 5.3

Sept 28, 2014

been helpful for Procter & Gambles success. I think maybe that was a reason why Unilever offer
a settlement as opposed to going straight into a lawsuit.
Q 3.) Is Unilever owed any compensation? What harm has the company suffered for which
they should be compensated? [Note: Compensation is due only for harm done. Compare
this case to compensating the owner of an automobile in a crash.
Even though the actions of Procter & Gamble were wrong, I think that a settlement of 10
million dollars is overdoing it. I guess maybe to avoid a lawsuit I would have chosen the
settlement route as well just an amount more reasonable because I do think that the amount that
Unilever was requested was a bit too much. As far as harm done, there was no physical damage
but as far as abstract harm Procter & Gamble did have an advantage since they saw confidential
information that possible bring down a company depending how vital the documentation was.
Unilever was fighting for fairness since now Procter & Gamble can be in the lead now with the
accessed information which would lead to a financial harm for Unilever; because they would not
make the same profits they were accustomed too. In a car crash yes there is physical damage but
there is also abstract damaged as well. I might not be physical hurt in a car crash but what if the
car crashed traumatized me and I have to go to therapy now? I should get compensated as well
not have to show just physical damaged.
Q 4.) Should P&G accept a monitor? Could a monitor harm P&G in any way? [Note: A
monitor would be bound by a confidentiality agreement.] Could a monitor really be
effective? That is, could a monitor detect instances in which P&G had used
misappropriated information?
In all honesty I feel like P&G should not accept the monitor especially if they are going
to settle financially with Unilever. That settlement should provide truce between both parties and
forgiveness, who knows if Unilever is also guilty for accessing information they shouldnt have
had. Ultimately it would cause more complications for both companies.

Dr. Khan
MGMT 4395

Ana Hernandez

CASE 5.3

Sept 28, 2014

Q 5.) Was Unilever overreaching, punishing P&G when its chairman had acted properly?
Or is the idea of a monitor a creative solution to a difficult problem? [Note: the sole
purpose of a monitor is to ensure that the P&G does what Pepper promised, and the cost of
the monitor would be inconsequential.]
In a way I do feel like Unilever was overreaching punishment, I am fine with the
settlement and their requirements such as relocating previous staff who saw the confidential
information. Like stated before Pepper was ethical by informing Unilever of the documents but
the monitor is overreaching punishment. Who knows if Unilever is doing the wrong thing too? If
there was second occurrence by P&G committing the same mistake, thats when I would agree to
the monitor otherwise no. Obviously if P&G does not due as promised there would legal
consequences so I doubt they wouldnt comply.

Dr. Khan
MGMT 4395

Ana Hernandez

CASE 5.3

Sept 28, 2014

REFERENCE:

1. Boatright, J. R. (2009). ETHICS AND THE CONDUCT OF BUSINESS, Upper Saddle River, Jew Jersey: Pearson
Education, Inc.