Leadership Lapses: When Is Firing the Right Response?

While it may appear that it is public pressure forcing corporations to take action when there is a transgression, this may be something of a mirage, according to Jonathan A. Segal, partner of Duane Morris’ employment group and managing principal of the Duane Morris Institute. “There are times when, due to pressure from various stakeholders, it appears that a company was compelled to terminate, and that’s because the process takes some time,” he says. “It looks as if it was in response to public pressure, and it’s not. I can think of at least a couple of times when, because some things were being done internally, it appeared as if the employer wasn’t doing anything.”

Parting ways often seems like the only acceptable remedy, according to Wharton marketing professor Americus Reed. Keeping the transgressor around is a viable strategy that depends on several factors, he says, including: how egregious the transgression is and how much “goodwill” the company has banked previously; the “brand” of the transgressor — “Is he or she humble or contrite, or a sympathetic character?”; and the immediate impact on sales and the long-term impact on the brand. What companies don’t want to do is to keep the person around and risk being perceived as condoning the behavior. “Usually, it’s safer in the above conditions to just cut bait, and not risk the immoral halo to the brand,” he says. “The other aspect that is tricky is that these CEO types always ‘fall forward’ — they get fired and get tremendous severance package benefits, so sympathy is hard to generate.”

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