Business Ethics and Governance Issues at HP: The Pretexting Controversy

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : BECG070 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges


Corporate Social Responsibility
Case Length : 19 Pages
Period : 2005-06
Pub Date : 2007
Teaching Note : Not Available
Organization : HP
Industry : Computer Hardware
Countries : US


The case examines the business ethics and governance issues relating to the pretexting controversy that engulfed US based HP during the second half of 2006. Though the civil claims arising out of the controversy were settled, it raised several other issues pertaining to invasion of privacy, identity theft, and using pretexting to obtain confidential information.

When the Board of Directors at HP found that highly confidential information that was discussed among the Board members was being reported in detail in the press, an investigation was initiated. The investigation was carried out by a team constituted by Patricia Dunn, the then Chairperson of the Board. During the probe, it was found that Keyworth, one of the Directors was responsible for the information leaks.

The matter was reported to the Board, and one of the Directors, Tom Perkins resigned from the Board, to express his displeasure about the way the investigation was carried out. He asked the HP Board to disclose the details of the investigation process.

HP admitted that pretexting was used to obtain the information about the source of leaks. This led to a series of investigations by several governmental agencies and the Attorney General of California on the illegal methods used by HP to carry out the probe. As a result of these investigations, Dunn and four other persons were indicted and the company paid US$ 14.5 million to settle civil claims.


Understand the business ethics issues arising out of the pretexting controversy at HP

Examine the corporate governance issues relating to the pretexting controversy at HP

Study the investigation process employed by HP to find the source of confidential information leaks

Examine the illegal/unlawful methods used during the investigations

Analyze the implications of the pretexting controversy at HP


  Page No.
HP Settles Civil Lawsuit 1
Background Note 2
Confidential Information Reaches the Press 4
The Investigations (Kona I And Kona II) 6
The Findings 7
The Aftermath 8
Who is Responsible? 10
The Road Ahead 11
Exhibits 12


HP, Pretexting Controversy, Civil Lawsuit, Corporate Governance Practices, Legal and Ethical Standards, Intellectual Property Rights, Identity Theft, Corporate Ethics, Privacy Rights, Protection of Confidential Business Information, Standards of Business Conduct, Kona I , Kona II, The HP Way, Code of Ethics, HP's Values

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