When does a company become a cult? A six-month investigation by BUSINESS WEEK into Astra USA Inc., the American arm of Swedish pharmaceutical company Astra, reveals that the transition can occur when a corporate culture gets hijacked at the top. A bizarre case of abuse of power appears to have taken place at Astra, where a 15-year pattern of sexual harassment emanated from the president's office and worked its way down through the organization. On Apr. 29, the president was suspended by the Swedish parent just days before BUSINESS WEEK went to press with the story.
Astra is a striking example of how vulnerable a corporate culture can be to its leaders' cues. To many who worked there, Astra was a cult led by an autocratic, charismatic leader who established an almost militaristic atmosphere at headquarters. Staffers had to eat lunch at precisely the same time each day. Permission was needed to hang anything personal on cubicle walls. A nine-week training period cut people off from their families. Young trainees were drilled in a rigid set of rules covering everything from sales techniques to dress.
Then there was the drinking and partying. Trainees were indoctrinated with the idea that success in sales required heavy socializing both inside and outside Astra. Bar nights were part of training and sales conferences. Managers, led by the president and including visiting Astra officials from Europe, asked young women to bars and back to their hotel suites. Advancement in Astra appeared to go to those who cooperated. Women who responded favorably to the attention from senior managers were called "The Chosen," and their careers prospered. It was a sales culture gone mad.
Some women did well in this environment. Others felt harassed by managers but kept silent. A few protested loudly, and there were financial settlements. In exchange for money, these women promised to be silent about their grievances. Astra says it settled only to avoid costly court procedures.
To the outside world, Astra was a successful corporation. Because most of the women who felt sexually harassed didn't go to the Equal Employment Opportunity Commission, the company appeared to be in good standing. Because the sales force was effective in selling Astra's pharmaceuticals to doctors, the home office perceived it as a winner.
What lessons can be drawn from this strange situation? In the recent case of Mitsubishi Motors Corp., alleged victims of sexual harassment went to the EEOC, which sued the company. An investigation will reveal what really happened there. But at Astra, there was no government intervention. Female employees didn't have the financial resources, resolve, or courage to risk their jobs and reputations battling harassment.
In the end, harassment is simply bullying by another name. One can see why its victims, in this case, might wish to remain silent. After all, it appeared to be encouraged from the top down. One cannot, however, absolve Astra in Stockholm, owned largely by the Wallenbergs, who failed to supervise its subsidiary adequately as it careened out of control.
It may be mere coincidence that two foreign companies in the U.S. in recent weeks experienced serious problems with the alleged sexual harassment of their employees. But in this era of economic globalization, where companies operate in dozens of cultures around the world, corporations everywhere must look beyond the financials in supervising their far-flung operations. Corporations, not governments, are primarily responsible for the people who work for them--and they must act to protect their dignity wherever they live.