BAHBMD 2

Management Assignment

Email Communication at Pricewaterhouse Coopers

Eamonn Mooney 09.03.2011

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Contents

Task 1

The events that put the spotlight on PwC’s use of email………………………………..Page 3

Task 2

The implications of the email scandal…………………………………………………...Page 5

Task 3

Recommendations to PwC……………………………………………………………..Page 10

Bibliography……………………………………………………………………………Page 13

Appendix 1…………………………………………………………………………….Page 15

Appendix 2…………………………………………………………………………….Page 16

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The events that put the spotlight on PwC’s use of email:

One minute to five on October 26th, 2010 and Stephen Tully, Senior Associate with

Pricewaterhouse Coopers, has just pressend ‘send’ on an email to his buddy Paul. It’s the end

of a working day for him and he’s in the mood for some ‘laddish’ behaviour. Little did he

know that by November 10th the contents of that email would be discussed in one of

Ireland’s leading daily newspapers having been already spread across the globe virally among

finance companies, accountants, law firms, technology firms, state bodies and construction

firms (Independent.ie).

What Stephen had done was to compile a list of 13 new employees with PwC, all female,

under the heading “this would be my short list for the top 10” which he then sent to his

friends (email attached, appendix 1). He had included photographs of all of the women

together with their names and the departments they worked in (he must have accessed the

firm’s HR records to obtain this information). Stephen then circulated the email among

seventeen of his male colleagues who, in turn, had forwarded it to other friends and

businesses. In one of the emails a very insulting remark was used to describe the ‘new intake’

while in another Paul Cummins remarks ‘Great work… have reservations about the last one

getting in’ (Nolan, 2010).

Senior management at PwC only became aware of the issue ‘after they were informed of the

emails by the Irish Independent’ (Independent.ie) and their human resources partner, Carmel

O’Connor, was quoted as saying ‘We are taking this matter extremely seriously and are

launching a full investigation. We will take all necessary steps and actions in line with our

firm’s policies and procedures’ (humanresourcesmagazine.com.au).

What had happened was that a group of men within the organisation had used the company’s

email system to circulate inappropriate material amongst themselves. The material was sexist,

degrading, and insulting to the women involved.

If this had been a once-off, solitary event the company might be believed when they say they

were taking it seriously and in line with the firm’s policies and procedures but it was not.

In 2008 in Australia a former PwC partner, Christina Rich, reached a secret settlement with

the firm in her $11 million sexual harassment case (ninemsn.com). During the case PwC had

been described as having a culture akin to a ‘Boys Club’.

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These incidents raise questions about the culture within PwC, the lessons learned from

previous events and the Leadership style practiced by management.

There are also questions regarding the use of email within the organisation because what the

men had done was to use the existing horizontal communication system – (‘The lateral or

diagonal exchange of messages among peers or co-workers that may occur within or across

departments. The purpose of horizontal communication is not only to inform but also to

request support and co-ordinate activities’) (Daft, 2010, p660) – to circulate ‘personal’

emails.

Regarding PwC’s use of email -

Pricewaterhouse Coopers have approximately two thousand employees in Ireland alone

(independent.ie) and constraining any communication between them is not an option as

communication is the life blood of the organisation. With it’s speed and immediacy email

communication is now the preferred method of communication in all businesses.

But there is complexity regarding the flow of information as it is horizontal as well as

vertical. The flow of information across the organisation is rarely comparable to the vertical

flow (Cole, 2004, p221). It is generally more task orientated and less formal than the vertical

flow where senior management communicate policies, plans, information and instructions

downwards (Cole, 2004, p221).

It is the informality of the lateral flow that allowed for the these crude emails to be circulated

with the solution being not in restricting the use of emails but to change the culture within the

organisation. The informal flow of information itself is an indication that the ‘grapvine’ is

alive and well in PwC.

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The implications of the email scandal:

The issues this presents for the organisation relate not just to the use of email but rather to the

way that management lead and the innate culture of the firm. This is because the incident

does not relate to the work being carried out by the men. This event is concerned with how

they behaved informally and outside their work brief but within the company, within the

office and while using official channels of communication.

It must be noted that the three main signatories to the email were all ‘Senior Associates’

which indicates some degree of authority within the firm but not necessarily management.

The new entrants were described as ‘associates’ and we must assume that this is the lowest

level within the firm implying another level between it and ‘senior’. One of the men

involved, David McDonough from Carlow, is twenty five years old (Minnock, 2010,carlow-

nationalist.ie) and his being a senior associate may indicate that the age group for that level

within the organisation would be mid to late twenties.

These men then would have been influenced by the leadership style of their immediate and

senior managers.

Tim Hannagan describes leadership as the process of motivating other people in particular

ways in order to achieve specific goals. This motivation of other people can be achieved in a

number of ways which affect leadership styles, and the way a person exercises leadership can

be identified as a series of actions which are directed towards a perticular objective. The

emphasis is on action because, although leaders may exert influence through inspirational

speeches, they are judged on what they do (Hannagan, 2008, p40).

‘Not the cry but the flight of the wild duck leads the flock to fly and to follow.’ (Chinese

proverb quoted by Adair, 1989 from Hannagan, 2008)

The description of PwC’s Sydney office as having a ‘boy’s club’ culture

(humanresourcesmagazine.com.au) – made by Christina Rich in 2008 following her

successful sexual harassment action against PwC – seems to be one that might also be used to

describe the Dublin office if the email scandal is anything to go by.

So, taking into account the train of events and the issues raised above the problems facing

PwC are:

*the existing culture.

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*The leadership style of management.

*the access to human resource records.

*the inability to learn from previous experience.

*the seeming lack of regulation regarding the use of email.

*lack of awarness of the grapevine.

The issues in detail:

Culture

Tim Hannagan proffers that successful organisations have a ‘way of doing things’, or culture,

which supports their strategy and leaders have to take into account different organisational

culture (Hannagan, 2008, p48).

Culture determines the ‘feel’ of the organisation. The stereotypic image of Microsoft, for

example, is a workplace where people dress very casually and work very long hours. In

contrast, the image of Bank of America, is of a formal setting with rigid work rules and

where people dress in conservative business attire. Texas instruments likes to talk about its

‘shirt sleeve’ culture, in which ties are avoided and where few managers ever wear jackets.

Southwest airlines maintain a culture that stresses fun and excitement with the firm’s CEO

Herb Kelleher, explaining the company’s emphasis on fun in an orientation video set to rap

music (Griffin, 2002, p166).

The fact that these men were circulating the emails among so many co-workers indicates a

culture of acceptance of that type of behaviour – certainly among the male members of staff.

The secrecy wrapped up in carrying out such an activity would also serve to separate out the

male and female workers into separate groups with the males indulging in predatory ‘frat

boy’ behaviour and this culture is borne out by the incident in Australia two years previously.

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Leadership

A leader is someone who can influence others, who has management authority (Robbins,

2005, p422) and who’s actions are observed and copied by their followers. A good leader will

also possess power and there are many types of power – legitimate, reward, coercive, referent

and expert. Of all of these referent power is the most abstract but can also be the most

influential. Referent power is based on identification, imitation, loyalty and charisma.

Followers may react favourably because of their identification, in some form or other, with

their leader. They may well be like them in personality, background or attitudes and in other

situations followers might choose to imitate a leader with referent power by wearing the same

kinds of clothes, working the same hours or, crucially, espousing the same management

philosophy (Griffin, 2002, p523). This type of behaviour was famously displayed when the

former US president, John F Kennedy, stopped wearing a hat on the advice of his handlers.

They noted that his face disappeared under a hat but was instantly recognisable when he wore

no hat. That decision ended years of hat wearing by men in the western world and saw the

virtual demise of the, up to then, traditional fedora that no man left the house without.

It could be assumed then, with some degree of accuracy, that the leadership style among the

male managers at PwC is one that allows for the type of behaviour exhibited by the sending

of the emails. This is an issue that PwC need to address.

Access to Human Resource Records

The originator of the email, Stephen Tully, must have been able to access the HR

department’s database in order to have obtained possession of the staff photographs, names

and details of the new female employees. This would imply that PwC do not have sufficient

inter-departmental controls over the security of information and is an issue that should be

easily handled by the I.T. department.

The Inability to Learn From Previous Experience

The brevity of the circulated emails along with the very short replies would indicate that no

explanation of what was going on was required. The men involved therefore both knew what

the email was about and had probably been carrying on in that manner for some time

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previously. Added to this is the knowledge that PwC had suffered the ignominy of having to

deal unsuccessfully with a very public and very costly sexual discrimination law suit in

Australia. Had the company learned from their experience in 2008 it is probable that

structures and procedures would have been put in place that would have prevented incidents

of this nature happening again. The fact that the incident did happen raises the issue of

corporate learning and PwC must address this.

Regulating Email

The issue here is not that the sending and receiving of emails be regulated but that the people

sending them retain a sense of responsibility for their actions. There appears to be a basic

lack of respect for fellow junior female colleagues among the senior associates in the Dublin

office. This is an issue that has resulted in international embarassment for the company and

shows a lack of respect among the male members of staff for female members.

Ostensibly the company has distanced itself from the affair-

Ronan Murphy (spokesman for PwC) has said the company ‘was taking the email scandal -

which has been given worldwide coverage after being featured on the US website

gawker.com - “extremely seriously” (thejournal.ie). Another PwC spokesperson, Johanna

Dehane, said the firm “launched (an) investigation after the email was brought to it’s notice

on Tuesday evening” (irishtimes.com). All of this is in addition to the stance taken by PwC’s

Human Resources Partner, Carmel O’Connor – “We are taking the matter extremely

seriously and are launching a full investigation. We will take all necessary steps and actions

in line with our firm’s policies and procedures” (independent.ie).

But the affair indicates that there are issues regarding the use of email within the organisation

and these issues need to be addressed.

Lack of Awareness of the Grapevine

The grapevine is the informal person to person communication network that links employees

in all directions, both horizontally, diagonally and vertically. It is usually not officially

recognised and it can connect staff in many ways ranging from the CEO through middle

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management and on to line managers and support staff. The grapevine will always exist

(think of people chatting at the photocopier or exchanging anecdotes in the lift) and will

become the dominant force when official channels are constricted or closed. Employees will

use it regularly to fill information gaps and one estimate is that as much as seventy percent of

all communication within an organisation is carried out through it’s grapevine (Daft, 2010,

p664). In the case of PwC the men circulating the emails were essentially using the electronic

grapvine to circulate inappropriate material that was not intended to transfer to the formal

network but which did, and very easily and with much speed.

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Recommendations to PwC.

Culture and Leadership

The issues of culture and leadership can be addressed simultaneously as the leadership style

of managers will influence the culture of an organisation. In their book ‘Management’

Stephen Robbins and Mary Coulter have identified a notable gender difference with regard to

leadership. They see men as being more likely to adopt a directive, command-and-control

style, relying on formal position authority for influence. Women, on the other hand, are more

likely to be democratic or participative. They tend more towards encouraging participation,

sharing power and information and attempting to enhance followers self worth. They lead

through inclusion and rely on their charisma, expertise, contacts and interpersonal skills to

influence others (Robbins, 2005, p444). The question of effectiveness was explored by

Robbins and the conclusion was that while males and females tend to be equally effective as

leaders an increasing number of studies have shown that females score higher than males on a

wider number of issues such as motiviating others, fostering communication, producing high

quality work, strategic planning, listening to others and analysing issues (see Appendix 2).

It would be of immense benefit to PwC to place women in pivotal positions of leadership and

power. These women would then, by the nature of their positions, also inform the innate

culture of the organisation. While this reccomendation might be seen as aspirational rather

than practical (given the necessary qualifications of skill sets and knowledge required for a

particular management position) it is a policy that would reap enormous benefits for the firm

if implemented.

The safety of female employees is tied into the culture and leadership issue and PwC need to

ensure that the organisation is both a safe and confortable place for women to work in and is

seen to be. It’s reputation to date, taking into account the email scandal and the 2008 case,

would indicate otherwise. To counter this PwC should ensure that all employees attend a

‘sexual harassment awareness programme’ that creates awareness of what defines sexual

harassment and the legal ramifications of violations (Daft, 2010, p502). This could be carried

out by an independent contractor and would encourage the proper and equal treatment of both

men and women in the workplace. The placing of women in senior management positions

would be very beneficial in implementing this programme.

Human Resource Records

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Bringing in computer and I.T. experts from outside the organisation on fixed term contracts

would allow the company to identify the flaw in the system that allowed the men to access

the employee records (allowing for the fact that one of them may actually work in HR). This

issue could then be wrapped up at minimal cost in the expectation that records would be more

secure than before.

The release of the information pertaining to the thirteen women involved also raises the

question of data protection according to the Officer of the Data Protection Commissioner,

Diarmuid Hallinan (independent.ie) and PwC have filed a breach of security with the DPC.

This is an additional isssue PwC must address by way of legal advice and consultation with

the women involved.

Learning from Previous Experience

A message sent through official channels within the organisation would inform all employees

of the firm’s attitude to the offensive behaviour displayed by the men involved and is

certainly necessary but an additional message could be sent through the grapevine. From the

CEO down to the line managers conversation could be directed against laddish behaviour and

this would reinforce the official company stance on the issue.

Email Regulations

This is an issue that could be dealt with in two ways.

(i) A set of reccomendations and codes of practice could be draughted explaining the

companies policy regarding the use of email within the organisation.

(ii) A zero-tolerance attitute to the discovery of inappropriate use of email could be

written into the employees contracts of emnployment.

If the men involved in the circulation of those emails knew that what they were doing was not

allowed by the company and that they would be summarilly dismissed if they were caught

sending emails of that nature they would be inclined not to initiate them.

In order for the reccomendations to take place it would be necessary for change to occur and

one way to encourage change, particularly cultural change and leadership syle change as

necessitated by this event, is through the use of ‘quality circles’ (Hannagan, 2008, p310).

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Originally developed in Japan the circles consist of four to fifteen employees, usually from

the same department/team, who meet regularly to analyse work problems and provide

solutions. They operate on the principle of ‘kaizen’, which translates as ‘continual gradual

improvement’ (Hannagan, 2008, p310). Although the use of quality circles declined in

popularity in the late eighties their effectiveness did not and using them would be an

advantage to PwC now.

If these resolutions were all implemented together the company would evolve into one where

people had more respect for each other and where the culture of the organisation was one that

fostered harmony among male and female members of staff.

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Appendix 1

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Appendix 2

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