Case Analysis Paper FOXTROT PHONE SCANDAL

THE NEW CITY MANAGER

You have been the Assistant City Manager of a small city for three years. One day, the City Manager, Mr. Jones, calls you in for a professional talk. He thinks very highly of your performance and that you have learned about all that you can in your present position. He advises that, for your career development, it is time for you to seek a more demanding position, and become a City Manager. Mr. Jones advises you to begin looking for a city manager position. He asks you to think about it. If you decide to leave, he will assist you though his contacts in the city management profession.

After you have discussed this with your significant other, you decide to take his advice and seek your own city. Mr. Jones assists you with telephone calls to other managers, an outstanding recommendation, and tips on how to find out about a community.

The recommendation of Mr. Jones and your outstanding references result in several interviews. One of these is from the Town of Sylvan Hills, an upper-class suburb in a major metropolitan area in another state. Mr. Jones knows both of the past two managers of Sylvan Hills. Both have advanced to other cities and have good reputations in the profession. Mr. Jones calls them to inquire about the Town, and reports back that outside of the usual “idiosyncrasies” of the Town Commission, the manager is generally free to manage and is provided the resources to do that job. The major perennial problem in Sylvan Hills is that of unions. There are also development pressures that are common to other municipalities in rapidly expanding metropolitan areas.

You have a successful interview with the five-member Town Commission; like what you see in the community; and, with the exception of news reports that Central City is crime ridden and apparently experiences problems with corruption, you think that this is an ideal way to begin your executive career. You accept the offer that is made to you.

As you assume your duties, you note that you are expected to have dinner with the Commission and the Town Treasurer preceding the twice-a-month Commission meeting. You think that this is a great idea and look forward to your first gathering.

You arrive to dinner with the Chair of the Town Board and are mildly surprised to be introduced to the president of a construction company and the area director of the largest labor union. The evening’s Commission meeting agenda is discussed over dinner and you find yourself feeling uncomfortable.

The last item on the agenda for the Commission meeting is a series of road contracts which will be awarded. During dessert, one of the commission members, in opening this topic, casually turns to you and asks you, what is your percentage?

The look of surprise on your face is a cue to the Chair to recommend a break. He escorts you to the restroom and says he understands your surprise and then explains to you how construction contracts are awarded in the area.

Basically, the system is one of mutually agreeable bid-rigging by area construction firms who rotate the contracts so that all make money. In return for the cooperation of the Commission, the members are given “bonuses,” as are several of the Town’s executives. Generally, ten percent of the contract is the bonus pool that is divided on the basis of various percentages for the Town’s officers. Since the union is a part of the arrangement, the Town’s cooperation provides peace and contentment on the part of the union. The Town is enjoying strong economic growth; public services are well funded; and, the citizens are quite pleased with their city.

Naturally, you are astonished and murmur your discontent to the Chair. Your term is “corrupt.” The Chair says that he understands your attitude, but he also explains that this minimal compensation arrangement is common in the area.

You tell the Chair that you are not interest in any percentage. The Chair says that this is not a good idea. The people who run the construction businesses and the unions can play “very rough.” He is quite serious. And, they “insist” that the Manager participate. A chill runs down your spine as you think of your partner and your two small children visiting at the moment with the Chair’s wife at their home.

The Chair explains that you will become a “consultant” to the construction company and that the percentage you receive will be billed as a consultant fee.

You are free to do some consulting under the terms of your contract with the Town. Thus, there are no taxes or other irregularities. He suggests that if you are uncomfortable with the arrangement, you could do as previous managers have done and contribute your percentage to charity.

In any case, the Chair says that your agreement to a percentage is critical to the continuance of the gathering. He offers to tell the Commission that your percentage will be the “usual” as he walks out of the restroom.

Remember, you cannot move back in time and avoid the meeting. You cannot move ahead in time and avoid the meeting.

What do you do?