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previous five years, some 512,000 customers had signed reaffirmation agreements with Seaxs, pledging to repay debts that totaled $412 million. Martinez suspected that his company's transformation from an exhausted. defeatist bureaucracy into "an aggressive, can-do company" had an unanticipated consequence: Managers simply wouldn't send bad news up the chain of command.

A culture of aggressively pursuing bad debts while filtering out bad news from {op maaagement had become part of the company's culture and official policy. Michael Levin, chief of Sears' law departmenq explained to his CEO that at least one outside law firm had told someooe in the company thal Sears' policy rvas questionable, But word of the alsrt, which might

DISCUSSION QUESTIONS

1. What is Sears' best strategy at this point? What would you advise Arthur Martinez to do?

2. As Ron Culp thinks about corporate communicatioirs and the events that have just unfolded in the board room, which audiences would you advise him to focus on first?

3. What do you suppose the interests will be for each of these audiences? Are they similar interests or are some of them in conflict with one another? What do they want to hear from Mr. Martinez?

4. As Bill Giffen examines Sears' credit collection policies and practices, what advice would you offer? How. can Martinez keep a sense of

WRITING ASSIGNMENT

Please respond in writing to the issues presented in this case by preparing two documents: a communication strategy memo and a professional business letter. In preparing these documents, you may assume the role of the Vice President for Corporate Communication for Sears, Roebuck & Company. Your task is to provide advice to Mr. Arthur Martinez regarding the issues he and the company are l'acing. Or, you may identiff yourself as an sxtemal managetnent consultant who has

been asked by the company to provide advice to Mr. Martinez.

Either way" you rfu&t prepare a strategy memo addressed to Arthur Martinez, Chairman and Chief Executive Officer of the company, that summarizes the

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Chapter 3 . Communication Ethics 71

have triggered a broader investigation within the company, somehow never worked its way up through the bureaucracy.

Martinez leaned back and motioned to his executive assistant, "Call a meeting of the Phoenix Team," he said. "Eight o'clock tomorrow." I'hat would mean 200 of Sears, Roebuck & Company's top executives would get the bad news directly from their CEO. lt would also signal the start of Sears' response to the charges.

Martinez then turned to Ron Culp, Sears' senior vice president for public relations and government affairs, and Bill Ciffen, vice president for ethics and business policy. "Oive me your best thinking," he said. "Tell me what you think we should do."

enthusiasm and excitement in his company and still encourage people to report and disclose bad news?

5. Even though the reaflirmation agreements are perfectly legal and enforceable, if properly filed with the courts, is it ethical to try to extract money from people who have legally declared bankruptcy? What ethical obligations do those people in bankruptcy have toward companies who lent them credil such as Sears?

6. Has the reward structure at Sears somehow affccted the communication skucture? What would you change if you could advise Mr. Martinez on restructuring either of those systems?

details ofthe case, rank orders critical issues, discusses their implications (what they mean and why they matter), offers specific recommendations for action (assigning ownership and suspense dates tbr each), and shows how to communicate the solution to all who are afrlscted by the recommendations.

You must also prepare a professional business letter for Mr. Mafiinez's signature. That document should be addressed to Sears' premium credit customers in good standing, explaining what happened and how the company intends to respond. Ifyou have questions about either of these documents, please consult your instructor,

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