“Authority for Social Issues”
In 1989 Russ Campanello, Vice President of Human Resources at Lotus Development Corporation, faced a difficult, managerial decision that would radically affect the company’s employee benefits policy. A few months into his occupancy, Campanello is addressed by an ‘Extended Benefits Task Force’ advocating that the corporate benefits given to spouses of married heterosexual employees should be extended to ‘spousal equivalents’ of gay and lesbian employees. Campanello is uncertain whether or not this major policy change is a good strategic move for the company, considering there is a plethora of other issues he needs to address. In this case, Lotus Development Corporation is facing a time of financial, and managerial uncertainty, that hinders their strategic planning, which ultimately leaves them as bait for their shark competitors. In order to grow, Lotus Development Corp. needs to redesign their human resource management to value equality and fairness within the workforce to attain talented individuals.
Lotus Development Corporation is a software designer company founded by Mitch Kapor in 1982. In 1983, their first product success, 1-2-3 DOS for IBM PCs, made Lotus the largest software provider in the nation. Lotus developed several improved software releases later on, but their financial successes rested solely on one product type. It was because of their lack of product differentiation that Lotus saw such a severe decline in sales in the late 80s, because once PC sales dropped so did theirs. As a result, competitors such as Microsoft saw the weaknesses within Lotus and began to dominate the market with a variety of products.
Problem and Symptoms
The Extended Benefits Task Force is made up of three employees who have researched and computed the differences in benefits given to married, heterosexual employees, and that of domestic partners of the gay and lesbian employees. They report to Campanello the discrepancies in the benefits package and proposed that there should be benefits extended to those spousal equivalents. At the time, no public companies provided benefits for such a scenario, and if Campanello agrees to the policy change, Lotus will be one of the first to ever do so (Gant & Gentile, 1994). As well, no states in America granted same sex marriages to even allow legal representation of the union (Muñoz, 2006, pp. 88). Campanello struggles to make a decision concerning this proposal because many employees throughout the company have conflicting views about homosexuality. Furthermore, he is worried about the effect his decision will have on the industry.
The organizational culture at Lotus also had its fair amount of challenges. Between the years 1987 and 1989, 11 top management executives left the company, which ultimately delayed the release of upgraded software programs. Additionally, Lotus had a high turnover rate for all its employees, each averaging less than 3 years with the company. Lotus did not perceive their high turnover rates, and changes in management style to be a problem, however, it was those same issues that allowed Lotus to focus on generating revenue and rather than developing tactical plans to aid the company’s strategic goals. At the same time Lotus is undergoing changes in their internal culture different from its founding in 1983. Former vice president of HR, Janet Axelrod, attributed Lotus’s shift in culture to its rapid success in the mid 1980s: “It gets more and more difficult the more successful a business become . . . to pull people . . . into business because they really don't [care] about anything that has to do with human beings” (Gant & Gentile, 1994, pp. 5). In 1987, before she stepped down as vice president of Human Resources, Axelrod strived for the department to establish workplace diversity, build employee