CASE 23 Starnes-Brenner Machine Tool Company: To Bribe or Not to Bribe?
The Starnes-Brenner Machine Tool Company of Iowa City, Iowa, has a small one-man sales office headed by Frank Rothe in La- tino, a major Latin American country. Frank has been in Latino for about 10 years and is retiring this year; his replacement is Bill Hunsaker, one of Starnes-Brenner’s top salespeople. Both will be in Latino for about eight months, during which time Frank will show Bill the ropes, introduce him to their principal customers, and, in general, prepare him to take over.
Frank has been very successful as a foreign representative in spite of his unique style and, at times, complete refusal to follow company policy when it doesn’t suit him. The company hasn’t really done much about his method of operation, though from time to time he has angered some top company people. As Presi- dent Jack McCaughey, who retired a couple of years ago, once remarked to a vice president who was complaining about Frank, “If he’s making money—and he is (more than any of the other foreign offices)—then leave the guy alone.” When McCaughey retired, the new chief immediately instituted organizational changes that gave more emphasis to the overseas operations, moving the company toward a truly worldwide operation into which a loner like Frank would probably not fit. In fact, one of the key reasons for selecting Bill as Frank’s replacement, besides Bill’s record as a top salesperson, is Bill’s capacity to be an organization man. He understands the need for coordina- tion among operations and will cooperate with the home office so that the Latino office can be expanded and brought into the mainstream.
The company knows there is much to be learned from Frank, and Bill’s job is to learn everything possible. The company cer- tainly doesn’t want to continue some of Frank’s practices, but much of his knowledge is vital for continued, smooth operation. Today, Starnes-Brenner’s foreign sales account for...