Appendix III

A Diversity Training Gone Awry: The Texaco Jelly Bean Jar Incident

Diversity training ought to be well planned and executed. Sometimes, the efforts to improve openness and understanding between groups may reinforce negative images and even prejudice. Rather than facilitating open communication and improved relationships, the end result might be divisive and offensive. An example of a diversity training gone awry is the infamous Texaco 1994 jellybeans incident that was featured in a lawsuit against the company (Eichenwald, 1996). The lawsuit, filed by the companys African American employees, alleged racist remarks as part of the companys culture. Among other incidents of prejudice and discrimination in the company, the lawsuit alleged that in a diversity training sponsored by the company, a comment was made by one of the managers that All the black jelly beans seem to be glued to the bottom of the bag, a remark that was interpreted as derogatory toward African Americans. In its defense, the company commissioned an independent counsel who reported that there was nothing inherently derogatory in any of the references to jelly beans. Indicating that the jelly beans reference was a common image used in diversity training,6 the independent counsel suggested that it may have been a

reference to inequities imposed upon African Americans by society, rather than a criticism. The case ended with a $176 million settlement announced November 15, 1996. Interestingly, after Texaco had reached this settlement, two shareholder proposals regarding diversity management were submitted, receiving strong support from other shareholders. This is an example of shareholder activism that can force boards of directors to rethink their ambivalence toward diversity, emphasizing the need to prevent future employment discrimination lawsuits and costly settlements (Buckridge, 2006; De Meuse & Hostager, 2001; Olson, 1997; Texaco Independent Investigators Report, 1996; Texaco Investigator, 1996)

Q 4. Refer to the case A Diversity Training Gone Awry: The Texaco Jelly Bean Jar shared in the question paper as appendix III (source: Barak, M. E. M. (2016). Managing diversity: Toward a globally inclusive workplace. Sage Publications., p: 340) and answer the following questions: (10 marks)

1. Comment on the statement, the efforts to improve openness and understanding between groups may reinforce negative images and even prejudice. Support your answer with examples.
2. Considering yourself as D&I managers, propose your recommendations to avoid incidences like the jelly bean jar discussed in the case above.