Social Irresponsibility in Management

students had previous experience. Results were obtained from groups in 10 countries: U.S. (166),
Sweden (109), Belgium (11), France (8), Canada (6), Norway (4), England (8), Denmark (3), Finland
(2), and Mexico (2). No one in the sample had heard of Panalba.

All groups were from captive audiences. This seemed advantageous since studies of volunteers have
shown that they are less authoritarian and they have a higher need for social approval [58]. Both of
these factors would be expected to affect decision-making in the Panalba case.

Role Descriptions. The role descriptions were simple and realistic, and they allowed flexibility for each
member. The instructions (Appendix B) emphasized that the subject should “act as you would act if
you were in the role of the person described. “Of the seven roles in the control group, the chairman
was asked to help the group reach consensus; he had no prior position on the subject, and he had no
information other than the background information. The president of the company had no prior position,
but some possible courses of action had been suggested to him by others in the company. Two other
board members had no predisposition and no additional information. The remaining three members
were favorably disposed toward Panalba prior to the meeting, but there was nothing in the role that
would prevent them from changing their opinion during the meeting. (The roles are shown in Appendix
C. All subjects received the background information, Appendix A.)

The roles were altered in two respects when trying to emphasize the stockholder role. The first
change was to add the following passage to each subject’s role:

It is important to note that the members of the Upjohn Board had a number of
discussions in the past as to the proper role that a Board member should take. A
resolution had been passed in 1950 which stated that the board’s duty was to
represent the stockholders. It was felt that society’s needs would be served best if
the board acted in such a way as to maximize the return to the stockholder - i.e.,
to maximize profits. (All of the current board members are well aware of this policy
statement.)

The second change was to provide subjects with accounting information to show how the various
decisions would affect the stockholders (column 1 in Table 2). There were two different approaches to
implementing the stakeholder role. One was to say that the board believed in the stakeholder role by
adding the following statement to each subject’s role:

Finally, it is important to note that the members of the Upjohn Board had a number
of discussions in the past as to the proper role that a Board member should take. A
resolution had been passed in 1950, which stated that the Board’s duty was to
recognize the interests of each and every one of its “interest groups” or
“stakeholders.” The stakeholders are those groups which make specific
contributions to the firm. Thus, the board is to consider the effects of decisions
upon employees, creditors, stockholders, customers, suppliers, distributors and the
local community. Furthermore, the board should consider only its own

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