Abstract
Lost Charcoal at Textile Frontiers is an investigative negotiation exercise involving ethical issues. In this exercise, two participants are asked to do a role-play, representing the two individuals involved in the negotiation. Mr Javed Khan, an employee at Textile Frontiers, has stolen some important and confidential information and Mr Wasif Kamal, General Manager of Textile Frontiers and a friend of Khan, is investigating the matter. The ethical nature of the issue is compounded by the fact that Kamal had earlier hired Javed Khan after bypassing regular hiring checks and knew about the past wrongdoing of Khan. Kamal is tasked with recovering the missing information whereas Javed wants to sell the information for money without being discovered.
Confidential Information for Wasif Kamal
You were Wasif Kamal, the general manager of Textile Frontiers (TF), a spinning mill producing specialty yarns. You received a late-night telephone call from the security supervisor of the mill, who informed you about a theft in the office premises. You rushed to the site of the incident and realized what has happened. You instructed the security supervisor to close the gates and stop anybody from leaving the factory premises.
Then you decided to inform Mr Jameel Ahmad, the CEO of TF:
‘It appears that someone, apparently an employee, breached into the specialty yarns development section and accessed three out of the five different locked workstations containing secure information. Three folders containing confidential information are missing. It looks like someone has tried stealing the formula for the under-development charcoal yarn. I am investigating the matter and will give you a detailed report in the morning.’
The CEO instructed you while trying to remain composed:
‘Kamal, I need the folders back when I reach mills in the morning; make sure no one leaves the factory premises, and don’t involve the police at the moment.’
Textile Industry in Pakistan
TF, a subsidiary of the Gujranwala Group of Companies (GGC), 1 a textile conglomerate headquartered in Lahore, Pakistan, was established in the early 1960s. It was recently refurbished to produce yarns specially developed for export-oriented apparel manufacturers. The apparel industry in Pakistan had grown rapidly in recent years. A number of apparel manufacturing units, especially knitwear manufacturers, were exporting their products in the US and Western European markets.
Although TF was not involved in apparel manufacturing, a number of its local buyers included export-oriented apparel manufacturers. The export boom had attracted many reputed international firms such as Levi’s, Nike, Gap, Timberland, among others, were sourcing their products from Pakistan. As the presence of international buyers intensified, so did the competition amongst the ever-increasing base of local manufacturers to attract new buyers and offer better quality at lower prices. The increasing competition had reduced the attractive profit margins that had earlier enticed many entrepreneurs to enter apparel manufacturing.
Upon realizing that the competition based on quality and cost would not be sustainable, some apparel manufacturers started developing their own products. The styling of garments would be driven by the tastes of international consumers. However, the feel and the texture of the fabrics used and the variety and novelty of different types of coloured yarns were considered as the arenas where Pakistani manufacturers could exercise their innovative abilities. Therefore, the apparel manufacturers had started actively sourcing coloured yarns to produce different types of fabrics.
Textile Frontiers
The CEO of TF understood the changes that were happening in the apparel market. He convinced the GGC board to orient TF for the production of specialized yarns during mill refurbishing. Specialized yarns could fetch at least twice the price of regular yarns with almost quadrupled profit margins. Given the expanding market, it was estimated that TF would start operating at full capacity, producing only the specialized yarns within a year. CEOs of some large apparel manufacturers had expressed their willingness to sign long-term contracts with TF for the purchase of specialty yarns. They had also extended their support in developing specialty yarns by sharing the preferences and fashion trends of international buyers and markets.
Process Control at TF
A multi-stage process control was the key to the quality, texture, feel and unique colour of the specialty yarn. Initially, cotton was selected from the appropriate geographical location with specified fibre length, colour and age. Once appropriate cotton was selected, then it was dyed in special colours with unique recipes of dyes and chemicals. The dyed cotton was then mixed with specifically selected non-dyed cotton to create exclusive texture and ‘mixed-colour or heather’ effect. Similar levels of extreme care were taken in other steps of the entire manufacturing process to ensure acceptable quality levels. Rejections could be extremely costly as such yarns were not consumed in large quantities by the local (non-export) apparel manufacturers.
Innovation Control at TF
The CEO of TF was aware of the risks involved in specialization and focused on the production of specialty yarns. He knew that the first key to success included an initiative through which TF was able to secure non-binding commitments for purchase and assistance from the export-oriented apparel manufacturers. International buyers had also appreciated the bold move of the CEO of TF and were willing to approve the newly developed specialty yarns for their respective brands. The second key was to ensure the strictest possible process and quality control for which a well-qualified and disciplined team was needed. The third factor was to protect the process of innovation and manufacturing from being copied by the competitors.
TF’s top management was careful in selecting the team. A hiring process was established to ensure that only the highly competent persons with unquestionable integrity were assigned key responsibilities. The hiring process included thorough background checks performed separately by the relevant department manager and the HR manager, and the signing of confidentiality agreements. Finally, clear procedures were established to ensure that the information about the process and quality controls were kept secure with elaborate systems designed to control and limit the flow of information. For example, the information about the different steps of process and quality control was secured at different places to ensure that in the case of a theft or unauthorized access, the loss of information was incomplete and minimized.
New Developments and Challenges
During the last couple of months, TF had been in exclusive negotiations with an international buyer and the largest apparel exporter in Pakistan for the development of a specialized charcoal yarn. The international buyer was launching a new collection of apparel and had estimated a high demand for the new collection. For TF, this development was a major breakthrough. If TF could develop the yarn and get buyer approval, it would be in a powerful position to negotiate long-term contracts for the exclusive supply of the specialty yarns. Whereas previously TF had successfully developed some specialty yarns and sold it in modest quantities, the matter pertaining to charcoal yarn was rather different—altogether, due to large and recurring orders and association with reputed international buyers. A contract for the supply of charcoal yarn would not only cement the leadership position of TF as an exclusive supplier of specialty yarns but also establish the reputation of TF as a visionary organization.
Your Background
You were a textile engineer with specialization in spinning. After graduation, you started working at GGC. Through sheer hard work and exceptional technical skills, you rose rapidly through the ranks. You were known as a solid team player and leader but you believed that your success was due to your high level of personal integrity. The CEO of TF had expressed his unreserved confidence in your abilities and you expected a reward and a long career at GGC.
About six months ago, you were appointed as the general manager of TF, making you the youngest general manager in GGC, responsible for the development and production of specialty yarns. It was a new assignment for you in an area you knew nothing about, that is, dyed yarns. Though you had exceptional technical skills in regular (non-dyed) cotton yarns, you did not have sufficient knowledge about the dyeing process involved in producing dyed cotton yarns.
When you took over the responsibility, the mill was facing severe problems in developing dyed yarns. Not a single yarn had been successfully developed owing mainly to the lack of control over the cotton dyeing process. The CEO tasked you with the process of finishing the existing development process without any further delay. The CEO personally trusted you and he instructed you to make a team of only those people who could be trusted.
While searching for technical resources to solve the problems, you came to know of the whereabouts of Javed Khan, an accomplished textile engineer with specialization in dyeing. Khan was an old friend of yours since college days but had gone to Karachi and you both had lost contact. Over the years, you had heard many positive things about the technical dyeing skills of Khan. Eventually, you contacted Khan and offered him an attractive compensation package. He immediately accepted your offer. Because you knew Khan personally, you felt that elaborate background checks were not necessary and talked to the HR manager to expedite the hiring process.
With exceptional technical problem-solving skills of Khan, you were able to complete the ongoing projects. A couple of months ago, you happened to meet another old college friend who shared some rumours about Khan. Consequently, upon your inquiry, Khan accepted that he had been fired from his previous job because he breached the confidentiality agreement; he had shared some special dyeing recipes with another colleague of his who also helped Khan financially. However, Khan assured you that it had happened only once and only because he had some financial obligations to meet; because of good compensation package offered by TF, he was well-off financially, and he had never thought of committing such a mistake again.
That day, around midnight, you received a call from the security officer of the mills, informing you of unlocked doors of the specialty yarn development section, found open during the security checks after regular office hours. The mill also had accommodation facilities for important staff including you, so you immediately rushed to the site. While heading to the site, you had a sinking feeling that perhaps Khan had accessed the secure area.
The security staff informed you that after the regular office hours, no person had left or entered the premises of the mill. Whosoever tried accessing the secure area most probably resided on the premises. You were also reassured that out of the five workstations that contained confidential data, only three appeared to have been accessed with the folders containing the confidential data found missing. You contacted the CEO.
The shocking news of apparent theft left the CEO in disarray. You discussed the consequences: a theft would force TF to go through the development process in a hurried fashion, potentially causing quality and process control problems for later. Competitors would be able to develop alternatives earlier than expected, denying TF the opportunity to nurture exclusive contacts and build a market reputation. TF could try warning potential competitors through industry association that the use of stolen information for the development of charcoal yarn would result in adverse consequences. Use of industry association platform could probably attract adverse publicity and affect the ongoing negotiations. Hence, its use only appeared feasible in case it was clearly established that a theft of information had happened. You both feared that if the news of potential theft leaked out, police might get involved and the whole process of yarn development in a tightly secured environment might get compromised. However, the CEO was relaxed because you were in charge of investigating the matter.
After a brief conversation with the CEO, you thought about how to start the investigation and what options were available to you. You were distraught with yourself that why did you ask the HR Manager to bypass the regular hiring checks and why did you not take any immediate action after having come to know of the earlier transgression of Khan.
Your Options and Objectives
As you evaluated your options, your future appeared bleak. You could tell the CEO about Khan and the lapse in the background check, in which case you could either be asked to resign or spared given your competence and future potential. Khan would be fired and handed over to police for the investigation. Subsequently, the industry would be notified and competitors warned. Or you could lie to the CEO about what you knew about Khan. As far as you know, no one at TF had the knowledge about the history of Khan. However, if the CEO were to ever find out that you had any involvement in the whole affair, you would face severe repercussions. If the missing folders could be retrieved, then Khan could be asked to resign and you might be able to salvage your career.
You asked the security officer to provide you with a list of all people who had access keys to the secured area and call them individually to meet you. You interviewed all people except Khan but could not find anything.
You were about to talk to Khan. Your priority was to recover the folders, which you believed were in the possession of Khan. You know that being a smart person, Khan was unlikely to have carried the folders to his home and may have hidden them at some secure place. Hence, a home-search was useless and would waste time. If you are unable to retrieve the folders, then you would be forced to notify the industry and warn the competitors. You also had to decide what you were going to tell the CEO about Khan and the circumvented hiring process.
Confidential Information for Javed Khan
You were Javed Khan, the technical manager at TF, a spinning mill which produced specialty yarns. You played a crucial role during the last few months in the successful development of specialized dyed yarns for TF and you worked on a very important and highly confidential project. You had just received a telephone call from the security supervisor of the mill, who informed you about a theft in the department which was under your supervision and asked you to immediately reach the office where the general manager of TF was waiting for you.
Textile Industry in Pakistan
TF, a subsidiary of the Gujranwala Group of Companies (GGC), 1 a textile conglomerate headquartered in Lahore, Pakistan, was established in the early 1960s. It was refurbished to produce yarns specially developed for export-oriented apparel manufacturers. The apparel industry in Pakistan had grown rapidly in the past years. A number of apparel manufacturing units, especially knitwear manufacturers, were exporting their products to the US and Western European markets.
Although TF was not involved in apparel manufacturing, a number of its local buyers included export-oriented apparel manufacturers. The export boom had attracted many reputed international firms such as Levi’s, Nike, Gap, Timberland, among others, which were sourcing their products from Pakistan. As the presence of international buyers intensified, so did the competition amongst the ever-increasing base of local manufacturers to attract new buyers and offer better quality at lower prices. The increasing competition had reduced the attractive profit margins that had earlier enticed many entrepreneurs to enter apparel manufacturing.
Upon realizing that the competition based on quality and cost would not be sustainable, some apparel manufacturers had started developing their products. The styling of garments would be driven by the tastes of international consumers. However, the feel and the texture of the fabrics used and the variety and novelty of different types of coloured yarns were considered as the arenas where Pakistani manufacturers could exercise their innovative abilities. Therefore, the apparel manufacturers had started actively sourcing coloured yarns to produce different types of fabrics for use in garment manufacturing.
Textile Frontiers
The CEO of TF understood the changes that were happening in the apparel market. He convinced the GGC board to orient TF for the production of specialized yarns during mill refurbishing. Specialized yarns could fetch at least twice the price of regular yarns with almost quadrupled profit margins. Given the expanding market, it was estimated that TF would start operating at full capacity, producing only the specialized yarns within a year. CEOs of some large apparel manufacturers had expressed their willingness to sign long-term contracts with TF for the purchase of specialty yarns. They had also extended their support in developing specialty yarns by sharing the preferences and fashion trends of international buyers and markets.
Process Control at TF
A multi-stage process control was the key to the quality, texture, feel and unique colour of the specialty yarn. Initially, cotton was selected from the appropriate geographical location with specified fibre length, colour and age. Once appropriate cotton was selected, then it was dyed in special colours with unique recipes of dyes and chemicals. The dyed cotton was then mixed with specifically selected non-dyed cotton to create exclusive texture and ‘mixed-colour or heather’ effect. Similar levels of extreme care were taken in other steps of the entire manufacturing process to ensure acceptable quality levels. Rejections could be extremely costly as such yarns were not consumed in large quantities by the local (non-export) apparel manufacturers.
Innovation Control at TF
The CEO of TF was aware of the risks involved in specialization and focused on the production of specialty yarns. He knew that the first key to success included an initiative through which TF was able to secure non-binding commitments for purchase and assistance from the export-oriented apparel manufacturers. International buyers had also appreciated the bold move of the CEO of TF and were willing to approve the newly developed specialty yarns for their respective brands. The second key was to ensure the strictest possible process and quality control for which a well-qualified and disciplined team was needed. The third factor was to protect the process of innovation and manufacturing from being copied by the competitors.
TF’s top management was careful in selecting the team. A hiring process was established to ensure that only the highly competent persons with unquestionable integrity were assigned key responsibilities. The hiring process included thorough background checks performed separately by the relevant department manager and the HR manager, and the signing of confidentiality agreements. Finally, clear procedures were established to ensure that the information about the process and quality controls were kept secure with elaborate systems designed to control and limit the flow of information. For example, the information about the different steps of process and quality control was secured at different places to ensure that in the case of a theft or unauthorized access, the loss of information was incomplete and minimized.
New Developments and Challenges
During the last couple of months, TF had been in exclusive negotiations with an international buyer and the largest apparel exporter in Pakistan for the development of a specialized charcoal yarn. The international buyer was launching a new collection of apparel and had estimated a high demand for the new collection. For TF, this development was a major breakthrough. If TF could develop the yarn and get buyer approval, it would be in a powerful position to negotiate long-term contracts for the exclusive supply of the specialty yarns. Whereas previously TF had successfully developed some specialty yarns and sold in modest quantities, the matter pertaining to charcoal yarn was rather different; altogether, due to large and recurring orders and association with reputed international buyers. A contract for the supply of charcoal yarn would not only cement the leadership position of TF as an exclusive supplier of specialty yarns but also establish the reputation of TF as a visionary organization.
Your Background
You were a textile engineer with specialization in dyeing technology and processes. After graduation, you had moved to Karachi and were soon able to establish your reputation as a highly skilled professional with great problem-solving skills. However, you always felt that your employer was not compensating you adequately for your talent and performance.
You had been facing financial difficulties due to your involvement in stock market trading. Initially, the trading was highly successful which motivated you to invest all your savings and a significant sum of borrowed money. Later, due to the sudden collapse of the stock market, the value of your investments dropped precipitously. Your long-term goal of establishing a dyeing house was shattered, leaving you in a huge pile of debt.
About seven months ago, while working for your previous employer, you met a dyeing manager working at a competitor’s firm. He needed some help in addressing some technical matters, but you were reluctant. The dyeing manager offered to help you unburden yourself from the debt in return for your assistance. You ended up sharing some useful tips and information and relieved a large portion of the debt. However, as luck would have it, some of your work colleagues saw you interacting with the dyeing manager representing competition. Upon subsequent inquiry, you were forced to resign despite your contestation that you had done nothing wrong.
Later, you received an unexpected call from your old friend Wasif Kamal who was the general manager at TF and he offered you employment which you accepted immediately. Upon initial inquiry by Kamal and later completion of the paperwork at TF, you misstated that you voluntarily resigned from your previous company. Kamal also helped you join early by having HR department bypass routine processes that included background checks. Few months after joining TF, you were surprised when Kamal confronted you regarding the circumstances in which you left your previous employer. You clarified that you were forced to take such an action due to severe financial constraints and huge debt. You assured Kamal that you had moved on and were focusing on rebuilding your professional career. You also assured Kamal that no one working at TF knew about your history, so Kamal needed not to worry about this matter and should instead focus on the issues in product development.
With a generous compensation package at TF, you again started investing in the stock market, hoping to recover your earlier losses and fully repay your debt. You again had some initial successes but with another collapse in the market, you ended up accumulating additional losses and your debt got bloated further.
You were working on an important project involving the development of a new yarn. You were responsible for your part of the project which required you to develop the specific dyeing recipe and the process and quality control procedures. Other technical staff was working on other parts of the project but you had limited interaction with them and understanding of the technicalities involved. As part of the standard protocol of product development, the staff involved in different parts of the project kept the information confidential.
A couple of weeks ago, you were again approached by the dyeing manager with whom you had earlier shared some information. This time, the individual wanted the information regarding the entire development process of charcoal yarn in exchange for an unbelievable sum of money of PKR5 million. You agreed for the one last time. You thought that sooner or later the competitor would get hold of the information regarding charcoal yarn, so in your estimation, the loss to TF would not be immense if the competitor were to get the information a bit earlier through you.
You developed a plan of how to access the information and secure it at a place for easy retrieval later. Because you were part of the team developing the charcoal yarn, you already had access to the section that contained relevant information. You intended to obtain five folders that carried information about different development stages, make copies of the documents, and return the folders to their original places to avoid suspicion and leave no trace.
One day, you got an opportunity after regular office hours. You had collected three out of five folders when you heard someone approaching. You quickly left, carrying the three folders with you. You hid the folders and returned to your residence in the mill.
After a few hours, you received a call from the security office, asking you to meet Kamal. You realized that the security staff had detected the missing folders but you were certain that no one had seen you in and around the office premises. You were also confident that the folders had been hidden at a secure place.
Your Options and Objectives
As you walked towards the office, you thought about the options. You could tell Kamal the truth and work out some way that did not incriminate you. If you were to tell the truth, all the hard work you had put in for TF will likely go to waste and your professional career destroyed. Whether you tell the truth or remain silent, you need the money.
You could sell the three folders to the competitor of TF or demand TF some compensation in return for the folders. Kamal had known about your past misdemeanour but chose to ignore it because he depended upon you for his success. His reputation would be lost if it were known at TF that Kamal had helped you get a job at TF by obviating the need for background checks.
You could offer Kamal some share in the deal-money but you were not sure whether or not Kamal would accept your offer because he always came across as a person of high integrity. Because you were reasonably sure that no one at TF knew about what had happened so you could also remain silent and feign ignorance.
You were about to meet Kamal. The two things that mattered to you were personal reputation and money.