BUSINESS ETHICS

CASE STUDY

THE MAGICAL $100,000

1. Did the employees know of the lost inventory?

The case study tells us the auditors interviewed 100 employees of the plant and
told no one knew anything. Even if anyone knew they wont accept the fact in front
of everyone. But, since there was an anonymous call informing about the $100,000
theft, we can conclude that few of the employess knew about the lost inventory.

2. If they did, why didn’t they tell more?

As stated in the earlier question even if the employees knew they wouldn’t inform
the auditor because of numerous reasons. But the main reason was FEAR. Since it
was the president son, they had a lot of power vested in him to esccape from the
case and later put the life and job of that disclosing employee at risk.

3. Were the president of the construction firm and his employees honest?

Since it is mentioned in the case study that “30 year old son of the president of the
electronics supply plant would sell inventory at one-halfth price if the construction
firm made out the checks to the son personally”. Now they purchased $200000 of
the inventory for only $100000, this shows that the president was personally
making out checks to the son to purchase. Hence its proved that the president was
dishonest.
 4. Had they done anything wrong?

Absolutely. Even after knowing that their son was selling at a very less price and
making personal profits, they still continued having business with him. So yes they
have done the wrong thing.

5. Could they be sued?

Yes, they could have been sued since they were a lot of illegal transactions going
on between the supplier and construction company and it continued even after
knowing about the illegality.

6. Why did the father resign?

The father retired because the illegality is out in the open and his son was the main
culprit. Now that everything is known to everyone the president would have
resigned voluntarily since he had no respect there and also the company would
have asked him to retire by complying with the ethics code of the company.

7. What was his responsibility?

Since he was the president of the company, he should have not let this happen
because its his responsibilty to maintain the ethics code of the company and his son
involved in the theft it definitly the president’s responsibility.

8. Should the bank’s corporate officers go to the police and indict the son
on grand theft?

An internal investigation has to be done finding out the reason of why the theft
happened after the internal investigation was done to why the theft occurred. The
decision would be taken by the higher authorities of the bank whether to go to the
police or not.
 CEMENT FOR SALE

1. Should you tell your customers? Justify your stand.

According to me, you need to be loyal to your customers. Your customers are the
one who have made your company one of the biggest names in the market so its
better if you communicate the same to them. Just in case if they find that out about
it later by themselves there would be false allegations that the business if running
in the same manner from a long time and it would totally result in fall of the
company. Hence, if you would be loyal then you would have more customers to
sell your quality products.

2. Should you discount the price? Justify your recommendations.

Yes, I would sell the less durable products at a discounted price as this would help
in keeping the name of the company in the market in good terms as well as make
sales for the less durable products at a much faster pace. Since all the less durable
products would be sold soon there wont be any more stock of them and later you
can start manufacturing your high quality products and run the business as usual.

3. Should you tell your employess? Justify your answer.

Yes, the employees need to know about the durability of the product as they are the
ones who are in direct contact with the customers. If employees are aware of the
scenario then it would be helpful for them to communicate the same to the
customers in any possible manner. Employees are always the essential ones of the
company and they would always help in bringing the company to new heights if
they are well informed of the company working.
 4. Would you use this cement for the foundation of your own house?
Justify your decision.

Yes, I would use this cement for the foundation of my house as it is clearly
mentioned that the product is still well above all industry standards and meets all
building codes and requirements. The product is just 5% less durable than our
standard company product but doesn’t mean it is a low quality product, this would
still be very good for any purposes of the house. Also if the construction of the
foundation of my house wit this cement helps in convincing my customers that the
cement is still a very good and durable one then why would I not do that. Therfore,
I definitely will use this cement for the foundation of my own house.

NITHIN KUMAR V

20SJCCPGD212

PGDBA

ST JOSEPHS COLLEGE OF COMMERCE