They were very few African-Americans in the roles of authority; in fact a survey that compared Texaco with the oil industry revealed that at Texaco white senior managers and the African-American ones were in a proportion of 80 to 1. In addition, the Equal Employment Opportunity Commission found out that African-Americans who wanted promotion were recruited at pay packages that were considerably low than what their white counterparts received (Economist, 1996). The EEOC also discovered the trend that the minority employees were promoted after they had put in twice the amount of time their white counterparts had put into one job level.
Consequences of Discrimination
In 1993, six U.S. Secret Service agents who happened to be African-Americans went to Denny's for breakfast. After waiting for a considerable period of time and complaining to the manager, when they still not get served, they filed a class-action race-discrimination lawsuit against Denny's. Not only did the management at Denny's had to respond to this lawsuit but they were further forced to deal with the myriad complaints and lawsuits that followed this event. As a consequence of racial discrimination that was being practiced at Denny's, the firm had to pay $54 million to 294,000 discriminated customers and their lawyers (Rice, 1996). Furthermore, Denny's was obliged into signing a decree with the U.S. Justice Department where the firm agreed to publicize non-discriminatory policies and retrain existing employees about the same. Moreover the firm's outlets came under the constant supervision of the Justice Department, for the following seven years, where they would be judged continually for any evidence of racial discrimination.
Texaco suffered legal action, bad publicity and boycott of its products because of its practice of racial discrimination. In 1994, six African-American employees filed a $520 million lawsuit against Texaco on behalf of 1500 other minority workers. In addition to this, there was a nation wide outrage regarding Texaco's treatment of its minority workers (Eichenwald, 1996). This resulted not only in ruining the goodwill of the firm but also in public boycott of Texaco products which in turn reduced the firm's share price in the stock market. The general public gave up on using Texaco credit cards and buying from independent Texaco dealers. As a result, the price of one share of Texaco dropped two points from 99 to 97 following the boycott.
Responding to Allegations of Discrimination
Both Denny's and Texaco would need to clean up their act if they want to survive in the American market. The first thing that both the firms can do is to admit their mistake and request apologize publicly from those people who were affected and also the African-American race in general. Secondly Texaco should provide compensation to those employees who suffered inconvenience at the hands of the firm just because of their race. Denny's should make extra effort to welcome the African-American customers by posting such signs at outlets and to retrain their front-desk employees (restaurant manager and the waiters) in showing extra courtesy towards such customers in order to compensate for their behavior in the past.
Fostering Corporate Diversity
It is particularly easier for large corporations to practice corporate diversity within their structure. This is due to the fact that a corporation with diversified needs is able to employ diversified people from different backgrounds. Large corporations should provide Equal Employment Opportunities to all of the candidates. Moreover they should fix a substantial percentage where only minority candidates be selected. In addition, such firms can follow affirmative action policy where they can discriminate in favor of minority employees, customers and suppliers.
The Denny's Case Study
Segal, David. "Denny's Serves Up A Sensitive Image. Washington Post: 4/7/99.
Rice, Faye. Denny's Changes Its Spots. Fortune: 1996.
The Texaco Case Study
Eichenwald, Kurt. Texaco Executives, On Tape, Discussed Impending A…