CASE STUDY: Cultural Change at Texaco.

Essay by SgtPaneUniversity, Bachelor'sA+, October 2005

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Ethics in Mangement PHL/323

Cultural Change at Texaco


Texaco was founded in the American South around the beginning of the 20th century. The oil and gas demands of the industrial revolution required energy providers and Texaco was an early pioneer of American oil drilling and refining services. The company's profits grew and the company matured parallel to the automotive industry. Unfortunately, the company's cultural values toward civil rights failed to evolve in step with the American civil rights movement of the 1960s. While many companies championed civil rights and established progressive programs to embrace diversity in the workplace, Texaco failed to change and allowed a laissez faire attitude towards racial integration to continue within the organization.

As a result, a discrimination lawsuit was inevitable, and Texaco settled a class action lawsuit in 1999. The lawsuit required that Texaco pay approximately $175 million compensation damages to the plaintiffs, and change the way they traditionally did business with regard to treatment of minorities and overall corporate ethics.

How could a one hundred year-old, American corporate giant allow for discriminatory practices to exist, or worse, permeate corporate culture? What could Texaco do to change the culture that allowed for discriminatory practices? This paper will examine Texaco's case, evaluate the facts associated with it, analyze the alternatives of the case, and make recommendations to remedy the situation.

Case Analyses:

Texaco's cultural problems go back to a far away time when racism was a way of life and reflected in many American institutions of the time. The corporate culture of Texaco did not evolve and was behind the times for the thirty years after civil rights legislation codified equal employment opportunity practices for all minorities. This was already known as good business practice for progressive corporations in America, but many, particularly in the South,