Ethical Business Practices Cadbury Schweppes, Essay Example

You have a choice. You could tell the Fortune 500 purchasing agent, “no problem,” sign the contract, deliver 1,000 computers quickly, and then blame the delay of the other 2,000 computers on the manufactures. Your contract would specify that your company is not liable for manufacture delays, so you’d be covered. Or you could tell the Fortune 500 Company the truth and risk losing the deal.

What pressure do you face? What are the sources of pressure? How might these pressures affect your judgment? What could you do to address these pressures? What questions should you ask yourself as you decide whether to close the deal or not with the Fortune 500 purchasing agent. List as many questions as you can and try to answer each one. Who would be affected if you chose to close the deal with the Fortune 500 Company? Describe exactly how each entity/person would be affected in the short term and the long term. What would your final decision be? What ethical theory/ theories would you use to justify your final decision?

The sales representative should not sign the contract because it would be unethical based on the knowledge that the Fortune 500 company would not be able to fulfill the order. The signing of the contract presents different problems that are unethical for the sales representative and the Fortune 500 company. The signing of the contract just to get business for the Fortune 500 will develop a bad reputation in the computer market. The customer will be able to see that the sales representative was not being honest and unethical by signing a contract that was unattainable (Business Case Studies,2015). It the Fortune 500 company’s responsibility to maintain an environment of ethical and honest sales staff while reminding employees that unethical decisions are unacceptable. The ethical and social responsibility begins with the organization empowering others to do the right thing along with honesty and a sense of integrity (Harman & DesJardins,2011).

The decisions by the sales representative to sign the contract has negative implications such as building a climate and culture of dishonesty that will impact profit and reputation in the future.  The sales agent decision to be ethical not sign the contract can have a positive impact on the company’s operations, sales, profit and customer satisfaction (Business Case Study,2015). The Fortune 500 decision to be ethical can lead to more customers along with the improve profit lines. The commitment to developing an ethical and social conscious workforce reduces employee turnover and building a reputation of a social and ethically responsible organizations.

The sales representative has personal and professional pressure because working based on 100% commission is about making sales to earn a paycheck. In addition, the sales representative source of the pressure is taking care of his daughter, which could lead to poor judgement and making an unethical decision. The professional pressure is from the top executives who want to make additional dividends from the signing of the new contract. The sales representative feels obligated to make the sale and sign the lucrative contract to advance his career and impress the executive.  The executives are guilty of pressuring and manipulating the sales representative, supervisors or managers to engaged in unethical decisions that will make the company bonuses, stock options and more profit.

The Fortune 500 company could prevent unethical behavior by developing a corporate written code of professional conduct for all employees, managers and executives. The written code will explain what type of ethical behavior is required and what unethical behavior is not acceptable along with the punishment for violating the written code of ethical behavior. The questions that should be asked be asked is” by signing the contract will it be considered an unethical act even though; we know the order will be backordered? Yes, it would still be unethical because the sales representative and the Fortune 500 company would be misrepresenting whether they can deliver the entire order. The second questioned would be the sales representative could legally write the contract which states any manufacturing delays is not responsibility of the Fortune 500 company? The Fortune 500 company would be well within the confines of a legal binding contract but would be morally and ethical wrong to sign the contract. The closing of this deal would negative impact the customers, the organization, sales department and the reputation of the Fortune 500 will be tarnished. The short term impact would be exaggerated profits because once the company loses the contract the revenue will have to adjusted. The long term damage will be losing future customers because of reputation of being dishonest and unethical. The final decision for the sale representative is to not sign the contract and work out a plan with the customer that would be acceptable on adjusted delivery date to kept the contract. The bottom line the sale representative needs to truthful and let the company know about possible delays.

Bleevit

What pressure do you face to close the deal with Bleevit?

The pressure would be based on a personal relationship with your significant other is a problem because the husband would feel the pressure of making a profit instead of doing the right thing. The source of those pressures would be signing a contract for refurbished computers that have more maintenance and the company would lose money. The spouse is leaving to start a new company and will not be held account thus the spouse’s judgement would not be clear. It is common that managers, directors and owners inherit problems or loses made by the previous owner that was leaving the company. The Fortune 500 company should be made aware that the new computers and some refurbished computers can be delivered and the company can discount the purchase of refurbished to make it value added for Bleevit computer company.  The spouse is in the perfect ethical problem because it would be unethical to sale refurbished as new which would hurt the company long-term. The Fortune 500 company will find out that the computers are refurbished when they ask for original papers on the refurbished computers. The owners would affect the decision to by 2,000 computers from Bleevit which short term the contract would be lucrative however, long-term Bleevit loses the opportunity to sale new computers as the company grows.

The primary questions would how long would the Bleevit company service the computers and what type of warranty plan comes with the purchase or will the Fortune 500 have pay more for maintenance contract. It’s important to have a long term maintenance contract that will continue to maintenance the computers with the option to buy additional maintenance contracts.

The secondary question is will all the computers been new directly from the manufacturer or aged computers that Bleevit purchased? The is important because the computers will break down or have problems as they age and the maintenance contract is critical to the purchase. The final decision is it would be unethical to sale refurbished for new computers. The ethical theory that should be applied in the case is Utilitarianism which is an ethical and moral issues that ensures fair choices with the least amount of damage or harm to the all parties(Hamilton,2015).

Questions for Part C:

1. What, if any, are the ethical dilemmas presented in the case above? Are there any conflicts of interest that could arise? The ethical dilemmas are circumventing the insider trading laws by going abroad to countries that do not have insider trader laws. The second ethical dilemma is using the information illegal to make a gain which is against the United States insider trader laws. In addition, the conflict of interest is the investment and wealth manager is in business with his brother.
2. How does the fact that international trading laws differ affect the morality and ethics of this situation? The international law takes the position that any trades done in that country has no consequences for insider trader secrets violations. The clearly means that the international law does not consider any moral or ethical issues. Thus, the international law is promoting unethical acts protected by international laws.
3. If international laws and cultures have different ethical standards, which ones do you follow? What makes one ideology better than another? The international laws do not consider ethical issues however, the person that lives on U.S soil must abide by the legal, moral and ethical laws of the land. The ideology that the actions took place in say Switzerland that does not have insider trader secret laws therefore, the financial agent could not be change for unethical acts. However, once the financial agents transfer that money to any United States financial institution they should be punished on the law for illegal and unethical acts.
4. How is it possible that the actions of you and Steve could be done legally overseas but also be considered unethical at the same time? Aren’t laws supposed to support ethical and moral behavior? The question has been asked for decades why criminals are able to have bank accounts overseas that cannot be seized by the United States and the same premise for the insider trader secrets. The laws of the land in the United States are based on ethical and moral behavior within the law to ensure all people have a fair opportunity. However, the international law does not support moral behavior therefore that country is an unethical contributor to insider trader secrets and should be charge as such.
5. Make an ethnically based argument on how you should proceed in this situation. Frame your ethical argument in terms of legality or economic resource allocation, or economic social good, or contractual obligations. The ethical argument is the international company is supporting criminal activities and unmoral acts and they should be held accountable. In addition, the international country is benefiting from the additional revenues from illegal transactions which motivate them to apply the no insider trade secret laws. According to the CFA Institute (2015), states that this international law of no insider trader secret laws impact the long term integrity of the stock market. This continue practice will eventually disrupt the economics of the stock market in the future.

Works Cited

Business Case Study. (2015). Ethical business practices Cadbury Schweppes case study. Retrieved from http://businesscasestudies.co.uk/cadbury-schweppes/ethical-business-practices/the-importance-of-ethics-in-business.html#axzz3rS7Syq2I

CFA Institute. (2015). Code of ethics and standards of professional conduct. Retrieved from https://www.cfainstitute.org/Translations%20of%20Code%20of%20Ethics%20and%20Standards%20of%20Pr/english_code.pdf

Hamilton, V. (2015). Types of ethical theories. Retrieved from http://www.ehow.com/info_8366868_types-ethical-theories.html

Hartman, L. P., & DesJardins, J. R. (2011). Business ethics: decision making for personal integrity and social responsibility. New York: McGraw-Hill/Irwin