HERE'S A TALE OF TWO COMPANIES. Both are foreign owned, both are embroiled in scandals are foreign owned, both are embroiled in scandals involving allegations of sexual harassment. Company A is confronted with the problem and punishes top execs. Company B stonewalls and mounts an aggressive campaign to discredit its accusers and portray itself as a victim of corporate slander.
(41) {{B}}For business schools looking for a few good case studies in damage control, last week was about as good as it gets.{{/B}} One was Swedish pharmaceuticals company Astra USA, a maker of asthma medications and the popular anesthetic Xylocaine. Facing similar charges, Mitsubishi Motor manufacturing of America opted for in your-face denial. Who did it right? It's too soon to know for sure. Astra's strategy may seem smarter. Financially speaking, at least, one can see why Mitsubishi is reluctant to issue a public mea culpa. Fessing up could expose it to as much as $ 200 million in damages.
Such controversies are no rarity these days. The Equal Employment Opportunity commission alone received more than 15, 000 complaints of sexual harassment last year, more than twice as many as in 1991. Its suit against Mitsubishi, filed last month, may turn out to be by far the biggest ever—and could eventually involve as many as two thirds of the company's 900 female workers.
(42){{B}} Mitsubishi's response was clear from the beginning.{{/B}} When the EEOC announced its case against the Illinois automaker, the company dispatched busloads of workers to picket the agency's Chicago offices. Attorneys for Mitsubishi will no doubt probe the private lives of the women lodging complaints, and may even accuse them of "Japanbashing." Mitsubishi's brass in Tokyo seemed a bit taken aback by the ferocity of the counteroffensive, to the point of suggesting that maybe the case could be quietly settled.
(43){{B}}Could such tactics be effective?{{/B}} If aggressive PR makes people doubt the allegations against the company, or encourages federal investigators to settle on more favorable terms, then the strategy will have succeeded. But there are risks, especially for consumer companies like Mitsubishi.
(44){{B}} That's no small threat, considering that Mitsubishi is struggling to turn a profit in this country.{{/B}}
(45){{B}}Astra's strategy seems savier.{{/B}} Its openness and prompt response might help it evade punitive damages, should any of the complaints go to a jury. In fact, that may be a chief reason the company acted even before it completed its own investigation. That said, Astra is in the soup to begin with because it had no adequate mechanisms for reporting incidents, and because it failed to deal with its problems before they became public. Women have complained of harassment at the company for more than a decade. Business Week reports incidents ranging from gropings at company retreats to suggestions that female sales reps could advance their careers by putting out sexually for their bosses—including the head of the company, Lars Bildman. (His lawyer denies the allegations, as do the other executives.) So far, Astra itself has offered no evidence suggesting any of the three are guilty. Both companies now promise to do better. Astra is overhauling its corporate personnel policies and plans to train managers on how to handle issues of sexual discrimination. So is Mitsubishi. Says the automaker's general counsel Gary Shultz: "We are going to become the model in handing sexual-harassment and-discrimination cases." That remains to be seen. If these sorts of scandals force companies to set up rules that actually work, that may be the best case study of all.
[A] That's precisely what the company did in response to a prior sexual-harassment suit filed by 29 women in 1994.
[B] "A great deal of attention should be paid to these affairs." Says Mitsubishis's spokesman.
[C] But "we're taking these allegations very seriously," says Astra spokesman Benjamin Kincannon.
[D] Outraged by the automaker's seeming disregard of its problems, perennial presidential hopeful Jesse Jackson and the National Organization for Women called on car buyers to boycott the company.
[E] When business Week published tales of wide-ranging abuse at Astra's American subsidiary, outside Boston, the company quickly faced up to the problem and suspended its U. S. chief executive, along with two top lieutenants.
[F] Prof. Martin Stoller, a crisis-management expert at Northwestern University, thinks so. "The aim of crisis management is to stop the attackers," he says.