AT&T Consumer Products

Joseph L. Badaracco Jr.

Case | HBS Case Collection | March 1992 (Revised October 1994)

AT&T Consumer Products

Abstract

Describes the factors AT&T Consumer Products managers considered in deciding whether to locate a new plant for telephone answering machines in the United States, Asia, or Mexico. Describes in depth the restructuring of AT&T during the 1980s, the competition facing its consumer products division, the division's overseas manufacturing strategy, the Mexican economy, and the country's macquilodora program. Encourages students to analyze where a company's and an executive's responsibilities lie in making a complex plant-siting decision involving overseas operations, and in making decisions about pay, benefits, bribery, gender-based hiring, waste disposal, and so forth in operating in developing countries.

Keywords: Restructuring; Competitive Strategy; Trade; Management; Operations; Crime and Corruption; Executive Compensation; Selection and Staffing; Demand and Consumers; Asia; Mexico;

Format: Print

27 pages

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Citation:

Badaracco, Joseph L., Jr. "AT&T Consumer Products." Harvard Business School Case 392-108, March 1992. (Revised October 1994.)

This note focuses on managers’ responsibilities—economic, legal, and ethical—to investors. In capitalist and some socialist economies, these responsibilities traditionally have been grounded in fiduciary duties and are typically part of the common law or statutory law or are incorporated in civil codes. But, as this note will show, fiduciary obligations are deeply intertwined with economic and ethical responsibilities.

When we think of human behavior, especially from a moral perspective, we often rely on explanations based on character. We think that good decisions and responsible behavior require people with integrity and strong character and that immoral behavior originates within people with little integrity and weak character. However, important research in recent decades strongly suggests that situational factors often dominate character in ethical decision making—for leaders and for members of their organizations. This note summarizes the recent research, shows its implications for the basic steps in ethical decision making, and provides a basis for in-depth discussion of the character-versus-situation question.

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AT&T Consumer Products

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