THE CORONADO YOUTH EMPLOYMENT AND RECREATIONAL SERVICES CASE

The Youth Employment and recreational Services (YERS) program has a
long and distinguished history in Coronado, California, a growing city
of 1.2 million.  In recent years, however, minority community members
have pressed for increased services and facilities in parts of town
with substantial minority populations.  These requests have created
dissension and growing controversy among YERS staff and members of the
board of directors.

            Margaret Rims was promoted to executive director of the
Coronado YERS in 1993 after having been with the organization for
twenty-five years.  Margaret began her career in recreational
development while attending Coronado University and has seen the YERS
program grow from a one-person staff with limited programs in a single
location to a staff of fifteen offering services at seven Coronado
sites.

            Over the years, Margaret Rims has been given credit for
the growth of the recreation program.  She has also been asked by the
National Council of Youth Employment and Recreational Services to lead
several regional and national workshops on recreation program
development.

            When Margaret Rims applied in 1993 for the position of
executive director, several staff and board members were surprised
because most assumed Margaret was happy in her recreational
development role.  Several members of the board voiced concern
regarding Margarets overall administrative qualifications, but the
prevailing sentiment supported her promotion.

            Margaret Rims became executive director of the Coronado
YERS in the climate of mounting pressure to increase services and
facilities in the heavily populated minority areas of northeast
Coronado.  Several local groups also questioned minority
representation on the YERS staff and board.  Margaret felt these
pressures were best ignored.  She disagreed with several members of
the board and staff who urged her to develop plans to increase
minority involvement.

            Margarets strongest staff support came from her friend
and personnel director, Jack Smith.  Hack has been TERS personnel
director for eighteen years. He has not been pleased with increasing
personnel requirements established by the national executive council
of YERS.  Specifically, he has disagreed with detailing job
descriptions and the institution of grievance procedures for
employees.  Jack believes employers should have more latitude than
these policies and procedures affords.  Some minority job applicants
have charged that Jack was responsible for keeping them from being
employed at YERS.

            In early 1994, several influential minority community
members met with Margaret Rims to discuss YERS program expansion.
Margaret told the group she could not recommend the expansion they
desired.  At the meeting, William Hung, an Asian lawyer in Coronado,
confronted Margaret with questions about jack Smiths hiring
practices.  Margaret stoutly defended Jack.

            The citizens group was not content with Margarets
responses.  William Hung contacted the YERS president, Dr. Atkins, and
requested a formal meeting with the board of directors.  The group,
with Hung as the spokesperson, also expressed concern to national YERS
officials.  National YERS funds, along with membership dues, are the
primary source of funding for the YERS programs.

            The national director of YERS contacted Dr. Atkins to
express his concern.  He further stated his apprehension that any
publicity of the issue might adversely affect the YERS fund drive
scheduled to begin within the month.

            Unknown to Margaret Rims, the board of directors met with
William Hung and the group who originally confronted Margaret.  Dr.
Atkins and the board pledged support of program development in
northeast Coronado and promised to look into the hiring practices
directed by Jack Smith.

            At the next formal meeting, the board informed Margaret of
the need to include this promised expansion in 1995 planning.  No
specific actions were taken regarding either Jack Smith or current
hiring practices.  At the same meeting, the firm of Jones and Belew,
certified public accountants for YERS, reported that revenues from
membership were down 10 percent from the previous year and that
facilities maintenance costs were increasing an unexpected 8 percent.
Those board members who had originally questioned Margarets
capabilities become vocal in their criticism.

            In the next few months, the division between the board and
Margaret Rims became open and hostile.  Dr. Atkins received reports
that Margaret stated in a staff meeting that she had been in YERS
before any of the board and would be there when they were all gone.

            The rift flared into open with Margaret submitted the YERS
program proposal for 1995 to the board of directors.  No inclusion of
the promised programming in northeast Coronado was made. Margaret
walked out of the meeting in anger.  She refused to return telephone
calls from Dr. Atkins.

            Dr. Atkins called an emergency meeting of the board of
directors. Sentiment ran high and the board voted to terminate
Margaret Rims.  Two members objected claiming the action was in direct
violation of national YERS policy, which called for warning or
probation before termination of any employee.  One member further
expressed concern about community reaction to terminating a
twenty-five-tear employee.

            Community leaders openly criticized both Margaret Rims and
the board. Margaret retained a lawyer and named Dr. Atkins and several
member of the board in a defamation of character suit.  She also
claimed specific damages for loss of retirement benefits because of
termination.  During the initial months of 1995, membership revenues
dropped by 12 percent and staff morale and productivity were extremely
low. Jack Smith was believed by Dr. Atkins to be a focal point if
internal disruption and a source of continuing information for
Margaret Rims. Amid these problems the search for a new executive
director began.

1.  What are the ethical and value issues in this case?

2.  Describe how the flow of information throughout YERS affected the problem.

3.  How would you describe the communication climate?

4.  What should Margaret Rims do?  What should the board do?