The Becton Dickinson Case Study

The Becton Dickinson case

Executive summary: The purpose of the Becton Dickinson (BD) case is to address whether companies should establish a globalized chart of ethical conducts or let each country with its constraints determine the code they want to follow. Employees are also wondering how to achieve greater performance with stricter ethic standards.

Business environment: During its restructuring following the appointment of their new CEO, BD a medical equipment provider and manufacturer is deciding how it should handle its ethical and business practices program in a global anti corruption movement period.  More and more rules were prohibiting bribery around the world; however, the US FCPA was by far stricter than the regulation in Europe for example making business more complicated. In 1996 several international organizations led anticorruption activities and urged businesses to comply and to implement them.

Organization: In 1897, Becton Dickinson is created by two friends with the goal of importing medical equipment. However, given the low quality of the equipment that was imported the two friends acquired manufacturing companies and started creating their own products. Business was expanding very quickly and they were pioneers of many medical products. However, in 1996 even with the record earnings and the huge ROE analysts were worried about the BD business. BD has been cost-cutting extensively but according to analysts, with the market quick evolutions there was no meaningful growth created that would ensure the company future.

Current situation: Clateo Castellini, the newly appointed CEO of the company in 1994 wanted to focus on two ideas. First, increasing the company performance and then aiming to be the company known for eliminating suffering and death from the disease throughout the world.

In 1995, the company restructuring was articulated around several points:

• Increase ROE to 20% and the sales growth to 10% by 2000 by focusing on core high potential products. The company aimed to be a leader on the market for all those products.
• Executive compensation would be based on value creation and not anymore on the operating income against budget.
• Improve coordination and integration in the company of the previously independent business under the same culture.
• Change the culture of the group focusing on the managers to make them more flexible. The goal was to implement continuous improvement in the company to match the changes of the market. This last part is the “master project” of Castellini.

Changing the culture of the company would be done by defining with employees the companies’ mission and values on one side, defining the roles and relation of employees in the organizational structure and finally by implementing an Ethics and Business Practices Program. We’ll see that last item in details in the next paragraph.