WEEK3: CASE 3: EVERYONE DOES IT

Case 3: Everyone Does It

Student M. Sgambelluri

Bryant & Stratton College

Buss450: Strategic Management

Prof. Laukhuf

September 24, 2011

WEEK3: CASE 3: EVERYONE DOES IT

There are both Internal and external factors that created the ethical dilemma. Some

internal factors include are that Jim Willis’ boss, Frank Ballard, has given Jim Specific

instruction not to disclose information. Also, the company code of conduct doesn’t allow for

disclosure of company proprietary information without approval. Lastly, the financial health of

the company can be jeopardized. Some external factors that created the ethical dilemma could be

that the financial industry that has profitability expectations which may be impossible to meet if

realistic information is provided. Or that the industry practice is to publicize positive completion

dates that are rarely met.

Is it ethical to withhold negative information from the client? It all depends on who is

viewing it. There are many problems that can arise in production, delivery, and maintenance.

Most of the time these issues can be solved without having to report them back to the client. If

you report all of these problems back to the customer it can be found unproductive. If the

problem has a serve impact on the client it is in the company’s responsibility to tell the client.

The customer was smart enough by providing safe guards against industry practice and

the deal did not go through until much later. There is not enough information as to whether or

not the same ordering delay would have happened if Jim had disclosed the information before

any negotiations were made. The disclosure in this case could have brought the two parties

together and gave them the opportunity to work more closely together and in the end it would

have helped ISI to close the contract earlier and also on better terms.
WEEK3: CASE 3: EVERYONE DOES IT

The term “industry practice” means that it is regulated by the government and

often have prescribed reporting requirements that carries over to the generally accepted

reporting formats for financial reporting. An example would be the utilities' balance

sheets present the utility plant as the first asset instead of current assets. Insurance and

securities firms will have financial reports that differ from the formats used by

manufacturers.(Industry Practice)

Moral development has three different levels, the preconventional level, the

conventional level and the principal level. The preconventional level is characterized by a

concern for self. Small children and others who have not progressed beyond this stage

evaluate behaviors on the basis of personal interest. The second level is the conventional

level. This is the level that I believe both Jim and his boss Fred are on. This level of

development is characterized by considerations of society’s law and norms. Actions are

just justified by an external code of conduct. The principal level is characterized by a

person’s adherence to an internal moral code. An individual at this level looks beyond

norms or law to find universal values or principles. (Kohlberg, 1971)

WEEK3: CASE 3: EVERYONE DOES IT

References

Industry Practice (n.d.). In Accounting Coach. Retrieved September 24, 2011, from

http://www.accountingcoach.com/terms/I/industry-practices.html

Kohlberg, L. (1971). Stages of Moral Development. Retrieved September 24, 2011, from

Google Scholar.

Wheelen, T., & Hunger, J. (2011). Strategic Management and Business Policy (12th ed., p.

214). Upper Saddle River, NJ: Pearson.